The Hong Kong real estate sector started strongly in 2026, with several stocks approaching historical highs, UBS released a research report saying. As valuations appear increasingly expensive, even on a PB ratio basis, the broker is adopting a more selective approach.

UBS particularly favored stocks with relatively low net gearing ratio, naming SINO LAND (00083.HK)  -0.150 (-1.282%)    Short selling $26.41M; Ratio 409.386%   , CK ASSET (01113.HK)  -0.220 (-0.483%)    Short selling $30.71M; Ratio 80.323%   and KERRY PPT (00683.HK)  -0.240 (-1.078%)    Short selling $1.65M; Ratio 48.464%   , considering them to have lower risks of equity-related issuance, given the industry's slow progress in deleveraging and the ongoing need for capital to replenish land reserves.

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Meanwhile, the broker also preferred stocks offering sustainably high dividends, such as SWIREPROPERTIES (01972.HK)  -0.220 (-0.948%)    Short selling $6.14M; Ratio 203.690%   , SINO LAND and KERRY PPT. Moreover, stocks with low PB ratios and supported by capital recycling or share buyback plans, such as CK ASSET and LINK REIT (00823.HK)  -0.020 (-0.054%)    Short selling $46.67M; Ratio 71.481%   , may see a valuation re-rating opportunity.

UBS liked SWIREPROPERTIES, SINO LAND, LINK REIT, CK ASSET and KERRY PPT for 2026, and maintained a cautious stance on HENDERSON LAND (00012.HK)  -0.500 (-1.702%)    Short selling $110.61M; Ratio 239.388%   (before results announcement), HYSAN DEV (00014.HK)  -0.870 (-4.510%)    Short selling $13.21M; Ratio 361.397%   and MTR CORPORATION (00066.HK)  0.000 (0.000%)    Short selling $42.60M; Ratio 164.371%   . For landlords, the broker raised its target prices for SINO LAND, CK ASSET, KERRY PPT, SHK PPT (00016.HK)  -3.600 (-2.675%)    Short selling $338.08M; Ratio 199.457%   , SWIREPROPERTIES and HYSAN DEV.

UBS' ratings and target prices for homebuilders are listed as follows:

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Stock | Rating | TP (HKD)
SINO LAND (00083.HK)  -0.150 (-1.282%)    Short selling $26.41M; Ratio 409.386%   | Buy | 11.2 → 14.3
CK ASSET (01113.HK)  -0.220 (-0.483%)    Short selling $30.71M; Ratio 80.323%   | Buy | 42.9 → 54.9
KERRY PPT (00683.HK)  -0.240 (-1.078%)    Short selling $1.65M; Ratio 48.464%   | Buy | 24 → 29.3
SHK PPT (00016.HK)  -3.600 (-2.675%)    Short selling $338.08M; Ratio 199.457%   | Neutral | 96 → 136
SWIREPROPERTIES (01972.HK)  -0.220 (-0.948%)    Short selling $6.14M; Ratio 203.690%   | Buy | 26.1 → 29.6
HYSAN DEV (00014.HK)  -0.870 (-4.510%)    Short selling $13.21M; Ratio 361.397%   | Neutral | 15.7 → 22.4
(HK stocks quote is delayed for at least 15 mins.Short Selling Data as at 2026-04-02 16:25.)

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