[ET Net News Agency, 24 August 2018] Deutsche Bank lowered its target price for
Shangri-La Asia (00069) to HK$14 from HK$22, and maintained its "buy" rating.
The research house said Shangri-la reported solid 1H RevPAR growth of 13.4%. Effective
share of EBITDA grew 24% yoy on 187bps margin expansion to 31.5%, still slower than DB's
expectation.
To factor in strong currency headwinds in 2H 2018-2019 and slower margin expansion
assumptions, DB cut its 2018-19 EBITDA forecasts by 8-10%.
It now values the hotel segment on 14x 2018 EV/EBITDA (down from 16x given cloudy China
macro outlook). For the property segment, DB widened its target NAV discount from 50% to
60%. On back of currency headwinds and slower margin expansion assumptions, DB lowered its
2018-19 net profits by 12-24%. (KL)