SINGAPORE (Feb 7): DBS Group Research is maintaining its “hold” call on RHT Health Trust even as it continues to be positive on the trust’s expansion plans and its exposure to the growing demand for healthcare services in India.
RHT announced on Monday evening that its distribution per unit had fallen 30.9% to 1.25 cents for 3QFY17, from the demonetisation policy that affected its occupancy and hospital income.
(See also: RHT Health Trust declares 3Q DPU of 1.25 cents, 31% lower on quarter)
DBS analysts Rachel Tan and Derek Tan noted that the demonetisation policy was only seen in January and RHT’s management expects the impact to continue to be felt in the coming quarter.
The pair also added that the market has yet to take into account the loss of income from the divestment of Fortis Hospotel. As such, DBS has maintained its “hold” rating on the stock with a lower target price from 95 cents to 85 cents.
The trust’s gearing remains healthy post divestment at 27% at end December. That means, it still has a debt headroom of some $314 million, which could support any potential acquisitions, its development projects at BG Road and Ludhiana which would add 279 beds, and its planned asset enhancement initiatives to add 292 beds over the next two years.
Shares in RHT are trading at 89.5 cents on Tuesday.
