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<Research>Citi Expects Greater EPS Upside Potential for HK Developers in 2026-2027, Recommends SHK PPT/ SINO LAND/ Others
Recommend 13 Positive 19 Negative 12 |
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Citi Research issued a research report believing that investors have overlooked the subdued performance of the Hong Kong real estate market last year, and are now focusing on the upside potential of home prices, profit margins and sales in 2026 and 2027; plans to accelerate investment to enhance net asset value; and the polarized rental outlook between retail properties (luxury homes showed positive growth) and offices in Central (with less negativity) compared to retail/ office spaces in surrounding areas (still negative growth), etc.. The broker believed that, compared to landlords, developers have greater EPS upside potential in 2026-2027, primarily benefiting from improved housing sales profit margins due to home price improvements and potential value-added benefits from new land acquisitions. Citi Research's recommended stocks include SHK PPT (00016.HK), SINO LAND (00083.HK), HENDERSON LAND (00012.HK) (after March) and HANG LUNG PPT (00101.HK). The latest ratings and target prices of the sector are listed in a separate table. Regarding dividends, the broker stated that SWIREPROPERTIES (01972.HK) and Hongkong Land committed to achieving mid-single-digit YoY growth, while the DPS growth of WHARF REIC (01997.HK) mainly benefited from interest cost savings under a stable 65% dividend payout ratio. Dividends for SHK PPT, CK ASSET (01113.HK), SINO LAND, KERRY PPT (00683.HK), HANG LUNG PPT, HYSAN DEV (00014.HK) and WHARF HOLDINGS (00004.HK) are expected to remain stable. The dividend of HENDERSON LAND, celebrating its 50th anniversary, remains controversial. LINK REIT (00823.HK), FORTUNE REIT (00778.HK) and CHAMPION REIT (02778.HK) are expected to see a decrease in DPU due to negative rental growth, with nil dividend for NEW WORLD DEV (00017.HK). AASTOCKS Financial News Website: www.aastocks.com |
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