HENDERSON LAND (00012.HK)  -0.200 (-0.753%)    Short selling $26.37M; Ratio 28.846%   has proposed issuing HKD8 billion convertible bonds, according to JPMorgan's report. Given its recent strong share price performance, this fundraising move was perhaps not entirely unexpected to the broker, though the choice of convertible bonds was somewhat surprising as it is not a common approach among Hong Kong developers.

Regarding equity financing (rights issues/ placements), JPMorgan believes that companies with higher leverage (for example, net gearing above 40%) and/ or those whose share prices have performed particularly well recently may face higher risks. Among the companies the broker has covered, NEW WORLD DEV (00017.HK)  -0.120 (-2.162%)    Short selling $2.13M; Ratio 9.063%   remains the most likely candidate for a rights issue.

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Since mid-June, the Hong Kong property sector has outpaced the HSI by 8%. However, the latest convertible bond issuance, coupled with a rise in HIBOR, may trigger short-term profit taking (especially for HENDERSON LAND).

During any share price pullback, JPMorgan recommended adding stocks with clear catalysts: SWIREPROPERTIES (01972.HK)  +0.080 (+0.408%)    Short selling $1.18M; Ratio 6.868%   (share buybacks + improving retail business in China) and LINK REIT (00823.HK)  -0.350 (-0.824%)    Short selling $3.95M; Ratio 3.209%   (inclusion in Southbound Connect + capital recycling).

As for HENDERSON LAND, the broker would choose to buy after the market digests what may be a weak set of results for 1H25 (the broker forecasted net profit to fall 46% YoY due to one-off items in 1H24). Tactically speaking, it is also optimistic that WHARF REIC (01997.HK)  -0.350 (-1.509%)    Short selling $5.12M; Ratio 26.069%   could catch up.
(HK stocks quote is delayed for at least 15 mins.Short Selling Data as at 2025-07-16 12:25.)

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