Ascott Residence Trust (SGX:HMN) - Share price, News & Analysis

HMN fundamental analysis
Snowflake Score
Valuation	5/6
Future Growth	1/6
Past Performance	1/6
Financial Health	1/6
Dividends	2/6

HMN Stock Overview

Ascott Residence Trust (ART) is the largest hospitality trust in Asia Pacific with an asset value of S$7.2 billion as at 31 December 2020.

Rewards

Trading at 25.7% below our estimate of its fair value

Revenue is forecast to grow 16.06% per year

Became profitable this year

Risk Analysis

Earnings are forecast to decline by an average of 4% per year for the next 3 years

Interest payments are not well covered by earnings

Dividend of 3.4% is not well covered by earnings

Large one-off items impacting financial results

+ 1 more risk

Ascott Residence Trust Competitors

Price History & Performance

Summary of all time highs, changes and price drops for Ascott Residence Trust
Historical stock prices
Current Share Price	S$1.11
52 Week High	S$1.18
52 Week Low	S$0.92
Beta	1.15
1 Month Change	-0.89%
3 Month Change	-0.89%
1 Year Change	8.82%
3 Year Change	-14.62%
5 Year Change	-3.90%
Change since IPO	-3.48%

Shareholder Returns

	HMN	SG REITs	SG Market
7D	-3.5%	1.1%	0.2%
1Y	8.8%	-4.7%	-3.4%

Return vs Industry: HMN exceeded the SG REITs industry which returned -4.7% over the past year.

Return vs Market: HMN exceeded the SG Market which returned -3.4% over the past year.

Price Volatility

Is HMN's price volatile compared to industry and market?
HMN volatility
HMN Average Weekly Movement	2.5%
REITs Industry Average Movement	2.8%
Market Average Movement	4.8%
10% most volatile stocks in SG Market	11.3%
10% least volatile stocks in SG Market	2.2%

Stable Share Price: HMN is less volatile than 75% of SG stocks over the past 3 months, typically moving +/- 3% a week.

Volatility Over Time: HMN's weekly volatility (3%) has been stable over the past year.

About the Company

Founded	Employees	CEO	Website
2006	n/a	Siew Kim Beh	https://www.ascottreit.com

Ascott Residence Trust (ART) is the largest hospitality trust in Asia Pacific with an asset value of S$7.2 billion as at 31 December 2020. Having listed on the Singapore Exchange Securities Trading Limited (SGX-ST) since March 2006, ART’s objective is to invest primarily in incomeproducing real estate and real estate-related assets which are used or predominantly used as serviced residences, hotels, rental housing properties and other hospitality assets in any country in the world. Ascott Real Estate Investment Trust's investment mandate will include student accommodation to be effected on 27 February 2021.

Ascott Residence Trust Fundamentals Summary

How do Ascott Residence Trust's earnings and revenue compare to its market cap?
HMN fundamental statistics
Market Cap	S$3.65b
Earnings (TTM)	S$295.82m
Revenue (TTM)	S$394.41m

12.3x

P/E Ratio

9.3x

P/S Ratio

Is HMN overvalued?

See Fair Value and valuation analysis

Earnings & Revenue

Key profitability statistics from the latest earnings report
HMN income statement (TTM)
Revenue	S$394.41m
Cost of Revenue	S$250.54m
Gross Profit	S$143.87m
Other Expenses	-S$151.95m
Earnings	S$295.82m

Last Reported Earnings

Dec 31, 2021

Next Earnings Date

n/a

Earnings per share (EPS)	0.09
Gross Margin	36.48%
Net Profit Margin	75.00%
Debt/Equity Ratio	62.6%

How did HMN perform over the long term?

See historical performance and comparison

Dividends

3.4%

Current Dividend Yield

107%

Payout Ratio

We’ve recently updated our valuation analysis.

Valuation

Is HMN undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

5/6

Valuation Score 5/6

Price-To-Earnings vs Peers
Price-To-Earnings vs Industry
Price-To-Earnings vs Fair Ratio
Below Fair Value
Significantly Below Fair Value
PEG Ratio

Key Valuation Metric

Which metric is best to use when looking at relative valuation for HMN?

Other financial metrics that can be useful for relative valuation.

The above table shows the n/a ratio for HMN. This is calculated by dividing HMN's market cap by their current preferred multiple.
What is HMN's n/a Ratio?
n/a Ratio	0x
n/a	n/a
Market Cap	S$3.65b

HMN key valuation metrics and ratios. From Price to Earnings, Price to Sales and Price to Book to Price to Earnings Growth Ratio, Enterprise Value and EBITDA.
Key Statistics
Enterprise Value/Revenue	16.2x
Enterprise Value/EBITDA	44.9x
PEG Ratio	-3.1x

Price to Earnings Ratio vs Peers

How does HMN's PE Ratio compare to its peers?

HMN PE Ratio vs Peers

The above table shows the PE ratio for HMN vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
Company	PE	Estimated Growth	Market Cap
Peer Average	31x

Forward PE

Price-To-Earnings vs Peers: HMN is good value based on its Price-To-Earnings Ratio (12.3x) compared to the peer average (31x).

Price to Earnings Ratio vs Industry

How does HMN's PE Ratio compare vs other companies in the Singaporean REITs Industry?

Price-To-Earnings vs Industry: HMN is good value based on its Price-To-Earnings Ratio (12.3x) compared to the SG REITs industry average (14.1x)

Price to Earnings Ratio vs Fair Ratio

What is HMN's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

HMN PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio	12.3x
Fair PE Ratio	13.8x

Price-To-Earnings vs Fair Ratio: HMN is good value based on its Price-To-Earnings Ratio (12.3x) compared to the estimated Fair Price-To-Earnings Ratio (13.8x).

Share Price vs Fair Value

What is the Fair Price of HMN when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: HMN (SGD1.11) is trading below our estimate of fair value (SGD1.49)

Significantly Below Fair Value: HMN is trading below fair value by more than 20%.

Price to Earnings Growth Ratio

PEG Ratio: HMN's earnings are forecast to decline next year, so we can't calculate its PEG ratio.

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Future Growth

How is Ascott Residence Trust forecast to perform in the next 1 to 3 years based on estimates from 11 analysts?

Future Growth Score

1/6

Future Growth Score 1/6

Earnings vs Savings Rate
Earnings vs Market
High Growth Earnings
Revenue vs Market
High Growth Revenue
Future ROE

-4.0%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts

Analyst Future Growth Forecasts

Earnings vs Savings Rate: HMN's earnings are forecast to decline over the next 3 years (-4% per year).

Earnings vs Market: HMN's earnings are forecast to decline over the next 3 years (-4% per year).

High Growth Earnings: HMN's earnings are forecast to decline over the next 3 years.

Revenue vs Market: HMN's revenue (16.1% per year) is forecast to grow faster than the SG market (7.8% per year).

High Growth Revenue: HMN's revenue (16.1% per year) is forecast to grow slower than 20% per year.

Earnings per Share Growth Forecasts

Future Return on Equity

Future ROE: HMN's Return on Equity is forecast to be low in 3 years time (4.7%).

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Past Performance

How has Ascott Residence Trust performed over the past 5 years?

Past Performance Score

1/6

Past Performance Score 1/6

Quality Earnings
Growing Profit Margin
Earnings Trend
Accelerating Growth
Earnings vs Industry
High ROE

-24.9%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: HMN has a large one-off gain of SGD305.2M impacting its December 31 2021 financial results.

Growing Profit Margin: HMN became profitable in the past.

Past Earnings Growth Analysis

Earnings Trend: HMN's earnings have declined by 24.9% per year over the past 5 years.

Accelerating Growth: HMN has become profitable in the last year, making the earnings growth rate difficult to compare to its 5-year average.

Earnings vs Industry: HMN has become profitable in the last year, making it difficult to compare its past year earnings growth to the REITs industry (87.6%).

Return on Equity

High ROE: HMN's Return on Equity (7.1%) is considered low.

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Financial Health

How is Ascott Residence Trust's financial position?

Financial Health Score

1/6

Financial Health Score 1/6

Short Term Liabilities
Long Term Liabilities
Debt Level
Reducing Debt
Debt Coverage
Interest Coverage

Financial Position Analysis

Short Term Liabilities: HMN's short term assets (SGD463.5M) do not cover its short term liabilities (SGD971.9M).

Long Term Liabilities: HMN's short term assets (SGD463.5M) do not cover its long term liabilities (SGD2.4B).

Debt to Equity History and Analysis

Debt Level: HMN's net debt to equity ratio (54.4%) is considered high.

Reducing Debt: HMN's debt to equity ratio has reduced from 69.9% to 62.6% over the past 5 years.

Debt Coverage: HMN's debt is not well covered by operating cash flow (5.3%).

Interest Coverage: HMN's interest payments on its debt are not well covered by EBIT (2.3x coverage).

Balance Sheet

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Dividend

What is Ascott Residence Trust current dividend yield, its reliability and sustainability?

Dividend Score

1/6

Dividend Score 1/6

Notable Dividend
High Dividend
Stable Dividend
Growing Dividend
Earnings Coverage
Future Dividend Coverage

3.40%

Current Dividend Yield

Dividend Yield vs Market

Notable Dividend: HMN's dividend (3.4%) is higher than the bottom 25% of dividend payers in the SG market (2.34%).

High Dividend: HMN's dividend (3.4%) is low compared to the top 25% of dividend payers in the SG market (6.16%).

Stability and Growth of Payments

Stable Dividend: HMN's dividend payments have been volatile in the past 10 years.

Growing Dividend: HMN's dividend payments have fallen over the past 10 years.

Earnings Payout to Shareholders

Earnings Coverage: With its high payout ratio (107.1%), HMN's dividend payments are not well covered by earnings.

Cash Payout to Shareholders

Cash Flow Coverage: At its current cash payout ratio (85.1%), HMN's dividend payments are covered by cash flows.

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Management

How experienced are the management team and are they aligned to shareholders interests?

5.1yrs

Average management tenure

CEO

Siew Kim Beh (50 yo)

5.08yrs

Tenure

Ms. Siew Kim Beh is the Chief Executive Officer and Executive Non-Independent Director of Ascott Residence Trust Management Limited. She had been the Chief Executive Officer of Ascott Residence Trust Manag...

Leadership Team

Experienced Management: HMN's management team is seasoned and experienced (5.1 years average tenure).

Board Members

Experienced Board: HMN's board of directors are considered experienced (3.3 years average tenure).

Ownership

Who are the major shareholders and have insiders been buying or selling?

Insider Trading Volume

Insider Buying: HMN insiders have bought more shares than they have sold in the past 3 months.

Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have been diluted in the past year, with total shares outstanding growing by 5.4%.

Data	Last Updated (UTC time)
Company Analysis	2022/06/25 00:00
End of Day Share Price	2022/06/24 00:00
Earnings	2021/12/31
Annual Earnings	2021/12/31