It hasn't been a good week for some companies with profit guidance and weak results being announced this week.
However, most would not have been surprising, having already talked about what would most likely not do well.
Picture as per 5 July post
Hospitality Sector
CDL Hospitality Real Estate Investment Trust
- Guided a total return being marginal loss.
- Has not done any revaluation yet as revaluations are done at the end of the year
- However given the trend, it is expected that negative revaluations be seen as the price per room is actually used in its Australia's Hotels.
With lack of demand this will drive prices down and create a negative revaluation. Furthermore, recent cash flows being affected would have affected the valuation model as well and revalue all its hotels.
Global Travel Related Sectors
SIA Engineering
-Recorded a profit of 10.7 million in 1st Quarter 2020 (April to June)
-However this was largely aided by the Jobs Support Scheme which without it would have created a 36.7 million loss.
-With mass market travel looking unlikely this year as guided earlier on, its unlikely for results to pick up this year.
Duty Free International Limited (Q1 being March to May)
-A net loss of 5.1 million rm in Q1 2020 compared to 7.1 rm profit in Q1 2019
-Revenue plunged 68.1% as air travel in Malaysia largely declined due to MCO
China Restaurant Industry
Xiabuxiabu (HKEX: 520)
-Hotpot restaurant operator in China
-Expect a net lost of 200 to 300 million rmb compared to profit of 164 million rmb the previous year
-This is on the back of revenue falling by 29% in the first half of 2020
Haidilao (HKEX: 6862)
-Hotpot restaurant with outlets worldwide but the most of its outlets in China followed by Singapore
-Expect a net loss as well, compared to a profit of 911 million rmb the previous year. The loss amount has not been stated.
-This is on the back of revenue falling by 20% in the first half of 2020
Hong Kong Property Sector
-Negative Revaluation seen across the board
-Main reasons being Covid and the prolonged protest
-Hotel Properties of Harbour Centre Development Limited(HKEX: 51) took an impairment of 1043 million Hkd or roughly 12.5% of its net asset value
-Hotel occupancy rate in HK came in at 15% in 1H 2020. Overall a very worried outlook was painted
-China Motor Bus a company which mainly holds office and industrial buildings in HK, guided for revaluation loss as well.
-Link Reit has also announced in May that as of March 2020, there would be a revaluation loss of roughly 12.3%. Link Reit is one of the biggest reit listed in HKEX with over 100 properties in Hong Kong and is mainly focused on retail and commercial(With more focus on retail).
-Prosperity Reit, a reit with office buildings and more known to have its properties not in the city centre also announced a revaluation loss of roughly 5%
Final Thoughts
-These news don't seem to bode too well for SGX Listed Stocks such as Hong Kong Land (Due to its Hong Kong Properties Portion) and Mandarin Oriental.
-Took a quick glimpse at Mapletree Logistics and the results is pretty decent. Occupancy rate remains stable and the Amount distributable was flat partly due to rental rebates given.
-Suntec Reit recorded a relatively lower revenue by 16.1%. Though this is pretty expected as there was 2 months of circuit breaker and since the start of Circuit Breaker, mass gathering is not allowed and therefore conventions are not possible. Its Suntec City Office revenue was down by < 1% and
Net property income was down 6%. A very stable set of office results for the 1st 6 months.
Food for Thoughts
-Have been wondering how results would go for some smaller caps such as LHT Holdings and Qaf Limited.
Both being quite essential to the food industries as one provides the pallets for storing food items and the other being a food provider itself.
