Why China could be Ascendas Hospitality Trust's saving grace

79.5% portfolio occupancy was disappointing.

According to Nomura, 3QFY13 revenue of SGD51.4mn was lower than both management’s as well as the firm's forecasts for the quarter.

ASHT’s AU portfolio numbers came in weaker than expected with the portfolio blended RevPAR of AUD129 coming in 7.2% below management’s projections.

Here's more from Nomura:

AU portfolio occupancies (79.5%) and average room rates ARR (AUD162) fell short of our estimates. Overall NPI margin of 33.2% was better than our forecast and compensated for the weak top-line performance from AU. 3Q DPU of 1.77Scts appears to beat both our and consensus forecasts.

We expect some revenue back-loading into the fourth quarter due to the Ibis Beijing Sanyuan acquisition that was only completed towards end-Dec 2012.

A recovery in China, which may lead to a rebound in AU resource-driven economies such as Brisbane and Perth, could prove to be a near-term positive catalyst for ASHT. On the flip side, potentially yield-dilutive acquisitions and equity raising remain the key downside risks to our TP.