facebook(Stocks Discussion) SGX: OUE Hospitality Trust [SGX: SK7]? - Seedly



07 Jun 2019



(Stocks Discussion) SGX: OUE Hospitality Trust [SGX: SK7]?

Discuss anything about share price, dividends, yield, ratios, fundamentals, technical analysis and if you would buy or sell this stock on the SGX Singapore markets. Do take note that the answers given by our members are just your opinions, so please do your own due diligence before making an investment!

Discussion (2)

What are your thoughts?

Billy Ko

Billy Ko

07 Jun 2019

Level 12Β·Financial Analyst at REPE Firm

Went to OUE Hospitality Trust's AGM last week.

10a.m. on a Tuesday morning, I had the notion it was gonna be less packed than an afternoon session. But I was proved otherwise.

The crowd was crazy, I thought I was the only one.

And then upon registration, I realised why

They gave every stapled securities holder a voucher to a complimentary set of chicken rice and drink at their famous in-house restaurant, Chatterbox. That being said, there wasn't any breakfast / lunch served, just your usual refreshments and biscuits served by the hotel staff roving around.

Can just imagine the opportunity cost of holding an agm here as opposed to renting out to external parties for other usages instead.

The chairman and board of directors started the event rather promptly at 10.

If you're in touch with the recent happenings of OUE, there's been talks about OUE Hospitality Trust and OUE Commercial Trust having the intention to merge.

Sandra gave a really detailed analysis of the merger here --


Such a happening, as one would foresee, would be greatly talked about during the AGM. However, Chairman Lee Yi Shyan started off the entire AGM saying he and his BOD will not comment anything on the merger and an Extraordinary General Meeting (EGM) will be conducted solely for this issue.

But somehow, we all know that humans, especially more so as we age, wouldn't take no for an answer, hence, when it came to the Q&A portion, the very first question:

I know you mention you are not going to take in any questions, but if I could just comment on the proposed merger, will you be fighting for us shareholders? We invested in OUE Hospitality Trust because we foresee the tourism sector of Singapore booming, and to merge with the Commercial arm of yours, it somehow doesn't align with our interest.

He really did make a valid point though. When management wants to consolidate their operations etc. the various considerations behind it must be carefully thought through and one of them is the synergy between the 2 arms. Just because they belong to the same parent company doesn't necessarily mean its a good decision.

Merging of companies usually occur among companies along the same value chain, either the manufacturer merge with the supplier to reduce production costs or manufacturer merges with another manufacturer to reduce competition.

I am greatly looking forward to how the BOD will answer this question when it gets brought up during the EGM.

I can see that based on the 2 properties you have now, the variable rent structure are different. May I know which is a better structure?

I guess one must really have a good understanding of the business otherwise the questions one poses would void other more insightful questions to be answered. So for this question the answer towards it was that terms have to be negotiated so that all stakholders are satisfied - a politically right answer (which management which point out a structure that triumphs another?)

The management emphasised on the opening of Jewel Changi bringing in more locals and tourists towards Changi area.

I was then prepared to pose my question to the board:

With the opening of Jewel Changi also signifies the opening of a 130-rooms Yotel Air. How do you foresee this impacting your revenue or Revenue per Available Room (RevPAR) of Crowne Plaza?

But just at the hour mark - 11a.m. The Chairman halted all questions and proceeded to the resolutions portion. So I lost my chance.

Kindda disappointed the Q&A portion was allocated so little time. But its interesting how fiesty the AGM was, can feel that these people are really emotionally attached to the company and some had a lot of faith in the management

"Chairman, if you are going to be the chairman of the post-merger entity, then I'll vote you in!"

Attending AGMs are always an interesting experience

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