Uneven recovery
? 1Q22 NPI of S$24.2m is in line with projections at 25.5% of our FY22F
forecast.
? Singapore, Maldives and Japan enjoyed strongest RevPAR growth in 1Q22.
? Reiterate Add with a higher TP of S$1.38.
1Q22 business update highlights
CDL Hospitality Trust (CDLHT) reported 1Q22 gross revenue and NPI of
S$46.2m/S$24.2m, +36.1%/+22.5% yoy, thanks to RevPAR growth across the majority of
its portfolio. The strongest RevPAR growth was recorded in the Maldives (+65.6% yoy),
leading to a 75% improvement in NPI to S$5.5m. Singapore RevPAR increased 40.7%
yoy, translating to a 27.5% increase in NPI to S$10.7m. In Japan, whilst RevPAR grew
27.9% yoy, NPI contributions declined 77% yoy to S$0.02m. However, New Zealand and
Australia reported a dip in RevPAR during the quarter. Gearing stood at 39.8% at end-1Q,
with 63.5% of its debt hedged.
Uneven recovery across its geographic footprint
Recovery across businesses in different countries remained uneven. In Singapore, the
improvement in RevPAR was due to higher ADR, with demand from staycations and
corporate project groups while W Hotel enjoyed strong leisure demand. The better
performance in the Maldives was due to 44.5% yoy increase in tourist arrivals. However,
following the Russia-Ukraine conflict in late Feb 22, business from Russia and Ukraine
inbound sources was negatively impacted. New Zealand reported a 24.4% yoy decline in
NPI to S$4.9m, on the back of lower RevPAR due to lower room utilisation at the Grand
Millennium Auckland, which continued to serve as a managed isolation facility during the
quarter as well as lower F&B revenue. The UK hotels turned in an NPI of S$1.8m (vs. a
loss a year ago) with a strong uptick in RevPAR, thanks to a return of major MICE and
sporting events as well as maiden contributions of S$0.4m from the acquisition of Hotel
Brooklyn. CDLHT’s Germany also delivered higher NPI yoy due to a low base in 1Q21
which included an impairment loss of S$1.2m. Its Italy hotel was operational in 1Q22,
supported by the gradual return of domestic, inter-Europe and US leisure travel.
Reiterate Add rating
We raise our FY22-24F DPU by 0.35-2.89%, post results, to input a slightly faster pace of
recovery following the relaxation of Covid-19 restrictions across its geographic footprint.
Consequently, our DDM-based TP is raised to S$1.38. We expect a more sustainable
recovery ahead given the resumption in travel. CDLHT’s expanded investment mandate is
another catalyst should CDLHT make an acquisition. Downside risk is slower recovery from
Covid-19 and lower income top-up