FW: AmBank Research - YTL Hospitality REIT : Expect higher occupancy in Australia Buy, 8 Sep 2017

 

STOCK FOCUS OF THE DAY         

YTL Hospitality REIT : Expect higher occupancy in Australia          Buy

 

We reaffirm our BUY recommendation on YTL Hospitality REIT (YTLREIT) after the results’ briefing yesterday with a higher fair value of RM1.39/unit from RM1.37/unit, after we rolled over to FY18 and introduce our FY20F forecast based on a DDM valuation. (cost of equity: 7.7%, terminal growth rate:1.5%, and risk free rate: 4.2%)

 

We make slight changes to our DPU by -0.25%/0.45%/-0.97% to 8.0 sen/8.60 sen/8.80 sen in FY18F/FY19F/FY20 estimates after accounting for higher occupancies in Sydney, Melbourne and Brisbane. For Melbourne and Sydney, we increased our average daily rental (ADR) by 5% but reduced our ADR assumption in Brisbane as the management is prioritizing its market share. Nevertheless, we expect the Brisbane Marriott to enjoy higher occupancy in FY18 due to Commonwealth Games 2018 in Gold Coast which to be held in April.

 

Others :

Plantation Sector : 2Q2017 Earnings Review: Unexciting quarter Neutral

 

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