Date of Report
October 1, 2024
Broker Name
UOB Kay Hian
Company Overview
Far East Hospitality Trust is a Singapore-based hospitality real estate investment trust (REIT) that focuses on the ownership and management of hotels and serviced residences. The trust aims to provide quality accommodation and exceptional service, catering to both leisure and business travelers.
Recent Developments
The report notes that the Chinese government has introduced a series of substantial stimulus measures aimed at revitalizing its economy. These measures are expected to positively impact the tourism sector, which is crucial for Far East Hospitality as it seeks to enhance its occupancy rates and revenue.
Revenue Exposure to China
While Far East Hospitality primarily operates in Singapore, it stands to benefit from increased tourism spending from Chinese visitors. As the Chinese economy recovers, the anticipated rise in outbound travel is likely to lead to higher occupancy rates at Far East’s properties.
Investment Recommendation
- Recommendation: BUY
- Current Price (S$): 0.64
- Target Price (S$): 0.77
- Potential Upside (%): 20.3%
Market Context
With the expected recovery in tourism driven by the Chinese government’s economic initiatives, Far East Hospitality is positioned to capitalize on increased visitor numbers and spending. The potential influx of tourists from China could significantly enhance the trust’s revenue and profitability.
Conclusion
Far East Hospitality Trust’s strategic focus on the hospitality sector and its potential to benefit from the revitalizing Chinese economy present a compelling investment opportunity. The anticipated growth in tourism and hospitality services positions Far East for substantial gains in the coming years.
