Analysts from DBS, CGS-CIMB and Maybank Kim Eng have maintained their “buy” or “add” calls on Ascott Residences Trust (ART) at target prices of $1.10, $1.08 and $1.05 respectively following its results release on July 28.

DBS Group Research analyst Derek Tan said despite its earnings miss in 1H20, ART’s appetite for portfolio rejuvenation remains robust despite on-going headwinds, powered by a debt headroom of above $1 billion. 

Despite a “weaker overall performance”, CGS-CIMB analysts Eing Kar Mei and Lock Mun Yee believe 2Q20 was the worst quarter for the trust.

“We expect domestic demand and alternative business to support ART’s income in the near term as countries open borders gradually. Management sees better q-o-q performance in 2H20 and believes it would take a year for a full recovery. Additional 12 properties have been reopened in July and 7 are scheduled to reopen in 3Q20,” they say.

Eing and Lock have increased their DPU for FY20-22F by 4-5% as they “realign” their numbers with ART’s 1H20 results, which are the first since its merger, and on better-than-expected RevPAU performance.

Maybank Kim Eng’s Chua Su Tye expects its master leases and minimum income contracts to support DPUs into 2H.

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