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<Research>UOB Kay Hian Trims Earnings Forecasts for WHARF REIC/ HYSAN DEV; Top Pick LINK REIT for HK Landlords
Recommend 13 Positive 24 Negative 22 |
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While the number of visitors to Hong Kong picked up last year, per capita tourism spending further weakened, UOB Kay Hian remarked in its research report. The broker predicted HKD to remain stronger than anticipated this year, which will continue to undermine the competitiveness of Hong Kong's tourism and shopping markets and heap pressure on the valuations of Hong Kong landlords. UOB Kay Hian kept an Underweight rating on the industry and reduced its earnings forecasts for WHARF REIC (01997.HK) and HYSAN DEV (00014.HK). The broker revised down its core net profit forecasts for WHARF REIC for 2024-2026 by 3.1%/ 8.1%/ 10.7% and revenue forecasts by 0.8%/ 3.6%/ 5.9%, reflecting dull retail market conditions, pressure on rental levels, and escalating financial costs. It cut its target price for the company by 24.6% to $24.72, with a Buy rating remaining in place. As for HYSAN DEV, UOB Kay Hian maintained its 2024 earnings forecast unchanged in the belief that the completion of AEIs in Lee Garden’s retail spaces will stimulate rental income growth in 2024. However, the broker trimmed the 2025-2026 retail property rental income forecasts by 3.8%/ 11.7% and the 2025-2026 core net profit (after perps distribution) forecasts by 4.9%/ 12.5%, expecting that strong HKD will continue to squeeze the retail industry. It dropped its target price for the company by 11.8% to $14.19, with a Buy rating. Among Hong Kong landlords, UOB Kay Hian's top pick was LINK REIT (00823.HK). It chopped its target price for the company by 6.8% to $42.13 with a Buy rating. AAStocks Financial News |
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