Hotel Properties posted “blockbuster” results for 2017, OCBC said in a note on Wednesday, adding that the stock has been “neglected,” but offers a proxy to a hospitality upcycle.
For 2017, core PATMI (profit after tax and minority interests) rose 52.8 percent on-year, while revenue was up 14.1 percent on-year at S$659.2 million, OCBC noted, pointing to the sale of Tomlinson Heights units and better hospitality-segment performance.
Looking ahead, OCBC pointed to a positive outlook for both property and hospitality.
’Boon for luxury hotels’
”We believe Singapore is at the early stage of a rebound in the domestic hospitality market and see the pick-up in global economic growth as a boon for luxury hotels and resorts around the world,” OCBC said. “We see HPL as a proxy to these growth drivers with its sizeable hotel portfolio.”
For the property segment, OCBC expected contributions from the sales of the remaining units in the Burlington Gate and Holland Park Villas developments, which HPL has 65 percent and 50 percent interests in, respectively.
OCBC also noted that the 4 Singapore cent dividend and additional 6 Singapore cent special dividend translates to a 2.7 percent dividend yield at Tuesday’s closing price.
It tweaked its target price to S$4.74 from S$4.83 and kept a Buy call. The stock last traded at S$3.78.