ANALYSTS SAY: Buy, Sell, Hold (14 June '18)

OCBC

CDL Hospitality Trust (CDREIT SP)

Company visit reiterates positive view

Management shared their optimism on room rate pick-up for CDLHT Singapore hotels going forward, on the back of tapering hotel-room growth and stronger visitor arrivals (especially from China and India). Minimal competition is expected from home-sharing platforms due to difficulties in extracting yields for high priced homes in Singapore and regulatory hurdles. On the acquisition front, management guided for more overseas acquisitions, especially in European cities. Maintain BUY with a target price of S$1.95.

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SATS Ltd: Looking attractive with a long-term view

For the period from Jan-Apr 18, Singapore’s Changi Airport’s operating statistics were encouraging as passenger throughput grew 5.0% YoY, aircraft movements rose 4.7% and air freight movements increased 3.8%. As highlighted before, strong traffic growth at Changi Airport is positive for SATS Limited (SATS) as we estimate that it handles ~80% of the traffic throughput there. We also expect Terminal 4 (T4), which opened on 31 Oct 17, to help contribute to longer-term traffic growth at Changi Airport. This also translates positively for SATS given that it is co-handling the ground operations at T4 with AirAsia. Our long-term positive view over SATS’ outlook remains unchanged, which is hinged upon SATS’ diversification strategy in its expansion outside Singapore as well as into non-aviation business segments through its many collaboration with overseas partners. In addition, a potential catalyst would be the potential partnership with Turkish Airlines to provide in-flight catering services at Istanbul New Airport, which in our view will become one of the key growth drivers for SATS outside Singapore. While we keep our FV unchanged at S$5.50, we think SATS is currently trading at an attractive price of S$5.06 (13 Jun 18 closing price), especially given its expanding presence in Asia. Upgrade SATS from HOLD to BUY

RHT Health Trust
Focus on proposed transaction

■ Recent weakness of the Indian rupee against the Singapore dollar to have negative impact on the settlement value of proposed disposal of assets.

■ Delays in rollout of new bed capacity to negatively affect RHT earnings projections.

■ Outstanding 2.15 Scts DPU for FY3/18 may be considered for payout.

■ Maintain Hold with a lower DDM-based TP of S$0.81.

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Singapore Property

Orchard Road home prices to hit S$4,000 psf ?
• Shun Tak invests S$0.6bn in two prime residential sites in Singapore
• Potential launch price could be close to S$4,000 per square foot
• Supply is picking up in the core central region; a unique offering from Shun Tak to differentiate its product is key to drive sales.

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