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OUE Hospitality Trust 1Q2017 Results – Signs of Recovery?

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Recently, I noticed the share price of OUE Hospitality Trust has gone up slight by a bit. It even broke above $0.70 on 5th April 2017. While research reports published by analyst says that hospitality sector is improving and the worst may be over for 2017, I still have doubts. Since OUE Hospitality Trust makes up 5% of my current stock portfolio, I decided to take a brief look at its 1Q2017 financial results.

Below are some notes I took from the OUE Hospitality Trust 1Q2017 financial results presentation. Read More

My Notes from OUE Hospitality Trust Annual Report 2016

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Recently, I received the 2016 annual report for OUE Hospitality Trust. As I am invested in OUE Hospitality Trust, below are points I felt are important for me to take note of.

  • Net Asset Value (NAV) per stapled security has declined over the years. The Net Asset Value (NAV) per stapled security for FY2014, FY2015 and FY2016 are $0.90, $0.90 and $0.77 respectively.
  • OUE Hospitality Trust has no debt due until July 2018.
  • In 2017, higher traffic through Changi Airport could potentially benefit Singapore’s hospitality sector.
  • Distribution yield has declined over the years. The distribution yield for FY2014, FY2015 and FY2016 are 7.45%, 8.51%, 6.98% respectively.
  • The board of directors consists of men with politician experiences. Mr Lee Yi Shyan, Deputy Chairman was previously a member of the Cabinet of the Singapore government from 2006 to 2015. Mr Chong Kee Hiong, Chief Executive Officer was an elected member of parliament for Bishan-Toa Payoh GRC. Mr Ong Kian Min, Independent Director was an elected member of parliament in Singapore from 1997 to 2011. I consider the management as a strong team with rich experiences.
  • The two top tenants in FY2016 by rental income are OUE Limited and OUE Airport Hotel Pte Ltd who contributed 59% and 15% respectively. This shows that OUE Hospitality Trust has strong sponsor support.
  • The directors held more units of OUE H-BT from the beginning of the year to the end of the year (No change in holds as of 21 January 2017).
Name Holdings at beginning of year/date of appointment Holdings at end of the year
Chong Kee Hiong 1,008,333 1,341,082
Sanjiv Misra 400,000 532,000
Liu Chee Ming 400,000 532,000
Lee Yi Shyan 8,000 10,700

OUE Hospitality Trust Yet to Shine with Its Gem Crowne Plaza Changi Airport

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The results from OUE Hospitality Trust kind of surprised me. The income for OUE Hospitality Trust comes from two main segment which is the Hospitality segment and Retail segment. I am expecting lower revenue from the Hospitality segment due to current economic headwinds in the tourism sector and stronger revenue from its Retail segment due to opening of Michael Kor and Victoria Secrets but it somehow was the opposite.

The Hospitality segment posted a higher revenue in 4Q2016 as compared to 4Q2015. I shall not go into the breakdown here as interested readers can read up their own from the presentation slides.

The Retail segment was somehow disappointing as it posted S$0.4 million lower in revenue for 4Q2016 as compared with 4Q2015. Rental rate fell was $23.6 in 4Q2016 and $24.6 in 4Q2015.

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