Since the liquidity issues in Hong Kong's commercial real estate intensified in 2023, JPMorgan conducted three risk assessments on 53 listed Hong Kong real estate companies, according to JPMorgan's research report.

In FY2024, 34% of the debt of these 53 listed real estate companies were classified as high risk, a slight increase from 33% in FY2023. The proportion of high-risk names among medium-sized real estate companies rose significantly to 72% from from 62% in FY2023. Except NEW WORLD DEV (00017.HK)  +0.260 (+5.372%)    Short selling $13.12M; Ratio 14.390%   , the credit indicators of large real estate companies remained robust.

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Regarding the impact of HIBOR, JPMorgan noted that a lower HIBOR helps reduce financing costs. A 100 bps reduction in HIBOR can decrease interest expenses by 12%, equivalent to approx. a 5% increase in earnings.

The broker estimated that HIBOR will not remain below 1% for long, and may gradually rise to 2-3% under the baseline scenario, but it will still be lower than the level above 4% before May 2025.

JPMorgan's top picks among homebuilders are SWIREPROPERTIES (01972.HK)  +0.140 (+0.770%)    Short selling $13.58M; Ratio 10.821%   , LINK REIT (00823.HK)  +0.500 (+1.218%)    Short selling $63.02M; Ratio 15.638%   and HENDERSON LAND (00012.HK)  +0.350 (+1.311%)    Short selling $239.43M; Ratio 25.001%   , all of which offering a dividend yield of over 6% and possessing solid fundamentals and income potential. The broker remained cautious on NEW WORLD DEV.
(HK stocks quote is delayed for at least 15 mins.Short Selling Data as at 2025-06-20 16:25.)

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