Ascott   

Ascott

Macquarie said it has started covering with an "outperform" rating and a target price of $1.21 in view of its positive growth outlook.



The company plans to grow its serviced apartment portfolio by more than 50% to 25,000 units by 2010, giving investors exposure to the fast-growing Asian region, Macquarie said.



"With strong GDP growth in Asia relative to global growth, The Ascott Group's earnings will be supported by rising Asian RevPAU (revenue per available unit) of 5-10% in 2006 and about 5 pct in 2007," Macqurie said in a note to clients.



"Overall, we forecast core EPS growth of 28% over the next three years," it added.



Macquarie said the company's creation of its pan-Asian serviced residence REIT, ART, also provides the company with an integrated platform to drive future growth, increase fee-based income and improve capital productivity.



"This model allows The Ascott Group to enjoy a stable income stream of fees from ART in addition to the core income stream from the management and operation of serviced apartments," it said.

 

CIMB-GK has upgraded its rating on serviced apartment operator Ascott Group to "outperform" from "neutral" and its target price to $1.19 after Ascott unveiled plans to expand its presence in Singapore. Ascott is building three new serviced apartments that will increase its serviced apartment units here to over 1,300 by 2008 when they are completed.



"We believe the focus on Singapore is timely, given the current tight supply of hotel rooms here. Ascott's fast time-to-market strategy is a distinct advantage. Besides saving on full-scale redevelopment costs, all three properties will be fully operational in less than three years," CIMB-GK said in a note to clients.



CIMB-GK has lifted its 2008 net profit forecast for Ascott by 2.9% to $68.8m to factor in initial contributions from the three new serviced apartments, which are expected to fetch higher room rates.

 

i concur. It is indeed on a downtrend.

 

From the TA indicators, its on a sustained downtrend. 

 

Can anyone out there share some light on this counter?

Thanks