Frasers Hospitality Trust’s target price slashed following rights issue

SINGAPORE (Sept 23): UOB Kay Hian is keeping Frasers Hospitality Trust on “buy” but has cut its target price to 81 cents, from $1.01 previously, to factor in a “heightened risk profile”.

The research house says it has adjusted its model to factor in FHT’s recently-announced 32 for 100 rights issue to raise $266.3 million to finance the acquisition of Novotel Melbourne.

“We lower our FY16F DPU estimate by 3% and that for FY17 and FY18 by 12- 13%, after factoring in the dilution from the acquisition,” says UOB lead analyst Derek Chang in a Thursday report.

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