reports
- Damon Shen
- Jieqi Liu
Hong Kong Property: CCL Index stabilises in Jan 24; channel checks on ...
The CCL index stabilised in Jan 24. Transaction volumes are hovering at a low level but we expect more project launches after the Chinese New Year. Our recent channel checks revealed poor implementation of the easing of property measures for non-PR homebuyers. Rising rental yield may provide some downside protection to property prices. Maintain UNDERWEIGHT. SHKP and LINKREIT remain our top picks for their defensiveness.
- Damon Shen
- Jieqi Liu
Hong Kong Property: Marginal improvement in secondary market seen in J...
The CCL index declined 6.1% in 2023, while the CVI index has been staying below 20 since Sep 23. In Jan 24, secondary transactions of 10 major real estates went up 10.8% mom (Dec 23: +9.8% mom). The sustainability of sales recovery needs to be monitored. With higher-than-expected fiscal deficits for 2023-24, the upcoming Budget speech will be a key focus in the near term. With a historically high inventory level, property prices remain under pressure. Maintain UNDERWEIGHT.
- Damon Shen
- Jieqi Liu
Hong Kong Property: 2024 outlook for Hong Kong retail market and landl...
In 11M23, Hong Kong’s tourist arrivals and retail sales reached 51.3% and 84.1% of 11M18 levels. However, it will be quite challenging to achieve further recovery. For 2024, we estimate 15% yoy growth in tourist arrivals and 2% yoy growth in retail sales. Office landlords are facing long-term pressure of cap rate expansion. Maintain UNDERWEIGHT on the property sector. LINK REIT is our top pick. We lower our target prices for Wharf REIC and Hysan in view of lower underlying net profit and DPS est...
- Damon Shen
- Jieqi Liu
Hong Kong Property: Stay cautious in 1H24; downgrade Hong Kong propert...
With negative carry of property investment and outflow of tourists, we expect developers and landlords to continue facing multiple challenges in 1H24. Given the weaker-than-expected property market recovery after the 2023 Policy Address, we downgrade the sector to UNDERWEIGHT. We cut target prices of SHKP, NWD, Wharf REIC and Hysan. LINK REIT and SHKP remain our top picks.
- Damon Shen
- Greater China Research Team
- Jieqi Liu
Hong Kong Strategy: Hong Kong Exchange and Hong Kong Property Sector -...
We have a neutral view on the policies related to the stock market and we expect a short-term rebound in ADT but sustained recovery will still depend on China’s macro development and US monetary policy. For the property sector, the relaxation of demandside management measures is within expectation. However, combining the aggressive land supply plan and weak population policy, the overall impact on the property industry is natural to negative. Sales need to be closely watched.
- Damon Shen
- Jieqi Liu
Hong Kong Property: Preview of the 2023 Policy Address: Assessing the ...
With Paul Chan softening his tone, when/how to ease cooling measures on non-PR buyers again becomes a market focus. We expect the government to marginally relax BSD/NRSD rules in the 2023 Policy Address. However, it may still be a bit too early to bet on the complete removal of cooling measures, as: a) the CCL index is still flat ytd, and b) Hong Kong has a very large pool of non-PR talents waiting to apply for PR a
- Adrian Loh Tzum Yung
- Benjaphol Suthwanish
- Damon Shen
- Desmond Chong Chee Wai
- Heidi Mo Jinghui
- Jacquelyn Yow Hui Li
- Jieqi Liu
- John Cheong Ming Chern
- Julia Pan Mengyao
- Kampon Akaravarinchai
- Ken Lee
- Kochakorn Sutaruksanon
- Leow Huey Chuen
- Llelleythan Tan Tan
- Ming San Soong
- Nurul Nazira Binti Abdullah
- Stevanus Juanda
- Tanaporn Visaruthaphong
Regional Morning Notes - Friday, August 11, 2023
GREATER CHINA Sector Automobile: Weekly: EV sales up 38% yoy and 9% mom in 1-6 August, in line with estimates. Maintain UNDERWEIGHT. Top BUYs: BYD, CATL and Li Auto. Results Alibaba Group (9988 HK/BUY/HK$94.30/Target: HK$133.00): 1QFY24: Strong beat on all levels after restructuring. Hysan Development (14 HK/BUY/HK$17.56/Target: HK$26.18): 1H23: Results distorted by AEI; competitiveness of retail portfolio enhanced. INDONESIA Results United Tractors (UNTR IJ/HOLD/Rp27,600/Target: Rp28,000):2Q23...
PTT PTT PUBLIC COMPANY LIMITED
544 CSE GLOBAL LTD.
C09 CITY DEVELOPMENTS LIMITED
UNTR PT UNITED TRACTORS TBK
GFPT GFPT
C52 COMFORTDELGRO CORPORATION LIMITED
PENT PENTAMASTER CORP BHD
14 HYSAN DEVELOPMENT CO LTD
PROP PROPNEX LTD
AWC ASSET WORLD CORP PUBLIC COMPANY LTD
WHA TB WHA CORP PCL
SENTRAL SENTRAL REIT
- Damon Shen
- Jieqi Liu
Hysan Development (14 HK): 1H23: Results distorted by AEI; competitive...
Hysan’s underlying profit dropped 16.9% yoy to HK$1,026m. Turnover fell 9.3%, as: a) 11% of retail area was closed for AEI works, and b) office continued to be under pressure. Net gearing edged up to 25.9%. Interim DPS was flattish at HK$0.27. Tenant sales recovery outperformed Hong Kong retail sales, while office is still under pressure. We revise down our 2023/24/25 earnings forecasts by 16%/17%/15% respectively. Maintain BUY. Target price: HK$26.18. Yield is at an attractive level of 8.2%.
- Damon Shen
- Jieqi Liu
- Julia Pan Mengyao
- Ken Lee
- Ming San Soong
- Terence Chiu
Greater China Daily: Friday, August 11, 2023
KEY HIGHLIGHTS Sector Automobile Weekly: EV sales up 38% yoy and 9% mom in 1-6 August, in line with estimates. Maintain UNDERWEIGHT. Top BUYs: BYD, CATL and Li Auto. Results Alibaba Group (9988 HK/BUY/HK$94.30/Target: HK$133.00) 1QFY24: Strong beat on all levels after restructuring. Hysan Development (14 HK/BUY/HK$17.56/Target: HK$26.18) 1H23: Results distorted by AEI; competitiveness of retail portfolio enhanced. TRADERS’ CORNER China Unicom (Hong Kong) Limited (762 HK): Trading Buy range: ...
- Damon Shen
- Jieqi Liu
Hong Kong Property: Government easing mortgage rules; home transaction...
The HKMA has eased mortgage rules for banks while the HKMC has amended MIP. Based on our calculations, residential properties valued between HK$10m and HK$30m will see the largest rise in LTV cap. We expect the Hong Kong government to further relax other property cooling measures to shield property prices from greater downward pressure. Maintain MARKET WEIGHT. SHKP (16 HK) remains our top pick.
- Damon Shen
- Jieqi Liu
Hong Kong Property: CVI index falls below 40; HKSAR relaunches private...
The CCL index fell to 166.02 and grew by 5.6% ytd while the CVI index fell to below 40. HIBOR remained high and residential transaction volume contracted further in Jun 23. We expect residential prices and sales to continue facing downward pressure. On 13 June, HKSAR announced the policy framework for Private SSFs − Pilot Scheme. Shortterm impact is limited but long-term change to both supply and price needs to be watched. Maintain MARKET WEIGHT. Top picks: SHKP and LINK REIT.
- Damon Shen
- Jieqi Liu
Hong Kong Property: Pressure on HIBOR marginally alleviated; retail mo...
CCL index stabilised at 166.77 while CVI index fell to 58.88. As the Hong Kong dollar exchange rate moves away from the weak side boundary, the pressure on its short-term rate will be partially eased. Considering the resilience of demand in the primary market, we expect property prices to further stabilise for the rest of 2Q23. For landlords, the retail segment continued to outperform the office segment in 1Q23 (ie opening up). Maintain MARKET WEIGHT. Top picks: SHKP and LINK REIT.
- Damon Shen
- Jieqi Liu
Hong Kong Property: Supports from diminishing effect of interest rate ...
CCL hits new eight-week low. In April, we saw divergent market performance in primary and secondary markets. Besides, the recent price cut (relative to previous batches) is the main fuel for the hot prime home market. We see property prices stabilising, as mortgage borrowing is feeling less pressure from the interest rate hike. We expect a more resilient demand from local consumers than tourists. Maintain MARKET WEIGHT. Top picks: SHKP and LINK REIT.
- Damon Shen
- Jieqi Liu
Hong Kong Property: Prefer retail leasing to property sales for strong...
CCL Index has gone up by 7.4% ytd. In 1Q23, we saw a higher market share from primary home transactions. Besides, the recent price cut (relative to previous rounds) is largely consistent with market price movement. We see limited upside on property prices in 2Q23, as high interest rates remain a key risk. We expect stronger momentum from tourism and retail spending. Maintain MARKET WEIGHT on the Hong Kong property sector. Top picks: SHKP and Hysan.
- Damon Shen
- Jieqi Liu
Hong Kong Property: Assessing the impact of Hong Kong’s 2023-24 Budget...
The Financial Secretary delivered the 2023-24 Budget today. The HK$5000 of consumption vouchers is in line with our expectations and the increase of consumption by mainland visitors will compensate for the decrease in value of the consumption voucher. The amendments of AVD are unexpected and will have a positive impact on property market, especially on mass market residential projects. SHKP will be a key beneficiary with its strong pipeline of mass market products.
- Damon Shen
- Jieqi Liu
Hysan Development (14 HK): FY22: Underlying profit in line and DPU mai...
Hysan’s underlying profit fell 8.6% yoy to HK$2,129m, in line with our expectations, thank to the resilient performance of the retail portfolio while office portfolio was under pressure. Full-year DPS was maintained at HK$1.44/share. Net gearing rose to 23.4% after the completion of two acquisitions. Outlook for 2023 is cautiously optimistic. We lower our 2023/24 earnings forecasts by 1.2%/0.9% respectively, and introduce our 2025 forecast. Maintain BUY and target price of HK$29.40.
- Damon Shen
- Jieqi Liu
- Jo Yee Ng
- Terence Chiu
- Zhifeng Shen
Greater China Daily: Monday, February 20, 2023
KEY HIGHLIGHTS Sector Consumer View of consumption fundamentals likely remains positive. Results Hysan Development (14 HK/BUY/HK$26.30/Target: HK$29.40) FY22: Underlying profit in line and DPU maintained; cautiously optimistic for 2023. HSI AND HS TECH INDEX OUTLOOK
- Benjaphol Suthwanish
- Damon Shen
- Hazmy Hazin
- Heidi Mo Jinghui
- Jacquelyn Yow Hui Li
- Jieqi Liu
- Jo Yee Ng
- John Cheong Ming Chern
- Jonathan Koh
- Kasemsun Koonnara
- Leow Huey Chuen
- Philip Wong
- Posmarito Pakpahan
- Roy Chen Chengzhi
- Tanaporn Visaruthaphong
- Waritthorn Kaewmuang
- Zhifeng Shen
Regional Morning Notes - Monday, February 20, 2023
GREATER CHINA Sector Consumer: View of consumption fundamentals likely remains positive. Results Hysan Development (14 HK/BUY/HK$26.30/Target: HK$29.40): FY22: Underlying profit in line and DPU maintained; cautiously optimistic for 2023. INDONESIA Results Bank Tabungan Negara (BBTN IJ/BUY/Rp1,370/Target: Rp1,700): 2022: Net profit up 28% yoy, above market expectations. MALAYSIA Results KPJ Healthcare (KPJ MK/BUY/RM1.06/Target: RM1.32): 4Q22: Earnings soundly beat expectations. Healthy Malaysia...
CHG CHULARAT HOSPITAL
SIE SIA ENGINEERING CO LTD
KPJ KPJ HEALTHCARE BERHAD
SDPL SIME DARBY PLANTATION BHD
14 HYSAN DEVELOPMENT CO LTD
SASSR SASSEUR REAL ESTATE INVESTMENT TRUST
PSH PRUKSA HOLDING PCL
SMELT MALAYSIA SMELTING CORP BHD
BBTN BANK TABUNGAN NEGARA PERSERO TBK PT
DELFI DELFI LTD
- Damon Shen
- Jieqi Liu
Hong Kong Property: Strong rebound of CVI and high-end property sales ...
CVI strongly rebounded to 51.99, suggesting a positive view from banks on the property market. High-end property sales saw a strong rebound in Jan 23. In the past, the highend residential segment always led market recovery. We expect the border reopening from 6 Feb will help boost transaction volume, while interest rate risk is lower in 2023 than in 2022. With NOVO Land to be launched soon, SHKP remains a top pick for a strong and balanced pipeline to capture market recovery. Maintain MARKET WEI...
- Damon Shen
- Jieqi Liu
Hong Kong Property: Monitoring the impact of border reopening with mai...
Hong Kong’s border with mainland China was finally reopened on 8 January, but there have been only 5,046 mainland visitors, which is equivalent to 4.2% of pre-COVID-19 levels. With the current COVID-19 wave in China passing its peak, we expect tourist arrivals and spending from mainland China to recover to 27%/20% of pre-COVID-19 levels in 2023. Maintain MARKET WEIGHT. SHKP remains as our top pick. Raise target prices of NWD and Hysan to reflect improving sentiment.
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