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Analysts divided on Frasers Hospitality Trust after weak 4Q results

Jeffrey Tan
Jeffrey Tan11/10/2020 10:24 AM GMT+08  • 2 min read
Analysts divided on Frasers Hospitality Trust after weak 4Q results
UOB KayHian has maintained its “buy” rating for the trust, but Maybank Kim Eng has retained its “hold” call for the trust.
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Analysts are mixed on the prospects of Frasers Hospitality Trust (FHT), which has hospitality assets across nine cities in Asia, Australia and Europe.

This comes after FHT posted a weak set of 4QFY2020 results ended Sept 30.

On one hand, UOB KayHian has maintained its “buy” rating for the trust with a higher target price of 55 cents from 54 cents previously.

On the other hand, Maybank Kim Eng has retained its “hold” call for the trust with a lower target price of 40 cents from 45 cents previously.

According to UOBKH, FHT should benefit from a potential recovery in domestic travel in Australia.

It notes that Melbourne has reopened in late October after a hard lockdown lasting more than three months.

The brokerage has forecast the trust to record distribution yields of 4.3% in FY21 and 8.8% in FY2022.

“[We are] cautiously optimistic on FHT’s outlook,” UOBKH analysts Nicola Ho and Jonathan Koh write in a note dated Nov 3.

However, Maybank KE points out that FHT’s demand visibility is low.

It notes that the trust’s occupancy levels were lower than its peers at 32% to 53%.

As such, the brokerage has cut its forecasts for FHT by 12% to 15%.

As at 10.19 am, FHT was up 3 cents or 7.1% at 45 cents with 2.4 million units changed hands.

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