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
- Damon Shen
- Jieqi Liu
New World Development (17 HK): FY23: Results and DPS below expectation...
NWD reported HK$6,117m underlying profit for FY23, decreasing by 13.7% yoy and 11.4% lower than our estimate. The insurance business is a highlight, while lower margin of HKDP and higher finance cost are major draggers. Full-year DPS is cut by 63% to HK$0.76/share, 55% lower than our forecast. Management targets 30s net gearing in FY26/27, backed by one-off dividend reset and the expanding IP portfolio. Cut earnings and DPS forecast. Downgrade to HOLD with target price of HK$16.03.
- Damon Shen
- Jieqi Liu
- Terence Chiu
- Tham Mun Hon
- Ziv Ang Sze Champ
Greater China Daily: Tuesday, October 3, 2023
KEY HIGHLIGHTS Economics PMI Policy easing may be gaining traction. Sector Commodities Weekly: Gold extended its losing streak from 25 sep 23; LME copper traded at the widest contango since 1994. Results New World Development (17 HK/HOLD/HK$15.24/Target: HK$16.03) FY23: Results and DPS below expectations; deleveraging to be a key focus. Downgrade to HOLD. HSI AND HS TECH INDEX OUTLOOK
- Benjaphol Suthwanish
- Damon Shen
- Jieqi Liu
- Johnny Yum
- Jonathan Koh
- Keith Wee Teck Keong
- Kitpon Praipaisarnkit
- Tanaporn Visaruthaphong
- Thailand Research Team
- Tham Mun Hon
- Ziv Ang Sze Champ
Regional Morning Notes - Tuesday, October 03, 2023
GREATER CHINA Economics PMI: Policy easing may be gaining traction. Sector Commodities: Weekly: Gold extended its losing streak from 25 sep 23; LME copper traded at the widest contango since 1994. Results New World Development (17 HK/HOLD/HK$15.24/Target: HK$16.03): FY23: Results and DPS below expectations; deleveraging to be a key focus. Downgrade to HOLD. MALAYSIA Sector Banking: Our study shows that Public Bank, HLBank, CIMB and Maybank hold the top four ESG scores. Maintain MARKET WEIGHT. ...
- 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
New World Development (17 HK): Disposal of NWS stake: A delicate balan...
CTFE has proposed a cash offer to acquire all issued shares of NWS (659 HK) at HK$9.15/share. The share offer is still pending approval by independent NWD shareholders. The HK$21,782m of proceeds from this NWS stake sale will lower NWD’s net gearing by 5.2% and improve its cash to short-term debt ratio. But with NWS no longer consolidated, NWD’s earnings and dividend are expected to contract by ~30%. Maintain BUY but cut target price by 15.1% to HK21.65.
- Damon Shen
- Jieqi Liu
- Johnny Yum Chung Man
- Kate Luang
- Kelvin Chau Siu Pong
- Ken Lee
- Roy Chen Chengzhi
- Terence Chiu
Greater China Daily: Wednesday, June 28, 2023
KEY HIGHLIGHTS Update COSCO SHIPPING Ports (1199 HK/BUY/H$4.79/Target: HK$6.65) Potential material transactions by associated company Qingdao Port. Maintain BUY. Li Auto (2015 HK/BUY/HK$134.30/Target: HK$246.00) Reaching inflection point; upgrade target price to HK$246.00. Maintain BUY. New World Development (17 HK/BUY/HK$19.68/Target: HK$21.65) Disposal of NWS stake: A delicate balance between stronger balance sheet and shrinking P&L. Small/Mid Cap Highlights China State Construction Develo...
- Adrian Loh Tzum Yung
- Damon Shen
- Desmond Chong Chee Wai
- Jieqi Liu
- Johnny Yum Chung Man
- Kasemsun Koonnara
- Kate Luang
- Kelvin Chau Siu Pong
- Ken Lee
- Kong Ho Meng
- Roy Chen Chengzhi
Regional Morning Notes - Wednesday, June 28, 2023
GREATER CHINA Update COSCO SHIPPING Ports (1199 HK/BUY/H$4.79/Target: HK$6.65): Potential material transactions by associated company Qingdao Port. Maintain BUY. Li Auto (2015 HK/BUY/HK$134.30/Target: HK$246.00): Reaching inflection point; upgrade target price to HK$246.00. Maintain BUY. New World Development (17 HK/BUY/HK$19.68/Target: HK$21.65): Disposal of NWS stake: A delicate balance between stronger balance sheet and shrinking P&L. Small/Mid Cap Highlights China State Construction Developm...
- 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.
New World Development Co: 1 director
A director at New World Development Co sold 805,338 shares at 20.116HKD and the significance rating of the trade was 100/100. Is that information sufficient for you to make an investment decision? This report gives details of those trades and adds context and analysis to them such that you can judge whether these trading decisions are ones worth following. Included in the report is a detailed share price chart which plots discretionary trades by all the company's directors over the last two ye...
- 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
New World Development (17 HK): Interim DPS down 17.9% yoy; targeting l...
NWD’s 1HFY23 underlying profit fell 13.8% yoy to HK$3.4b, mainly due to a plunge in the profit margins of Hong Kong development properties and a rise in interest expense. 1HFY23 DPS decreased 18%yoy to HK$0.46/share. Management guided lower net gearing ratio in the next 18 months, while reiterating that rights issues and equity financing are not valid options. Stronger sales and actions to release corporate value may help. Cut DPS forecast. Maintain BUY. Target price: HK$25.50.
- Damon Shen
- Jessie Guo Yuting
- Jieqi Liu
- Jo Yee Ng
- Johnny Yum Chung Man
- Julia Pan Mengyao
- Kate Luang
- Kelvin Chau Siu Pong
- Ken Lee
- Sabrina Soh
- Terence Chiu
- Vincent Khoo Boo Aik
Greater China Daily: Friday, February 24, 2023
KEY HIGHLIGHTS Sector Automobile Weekly: BYD’s new PHEV models are emerging as game changers. Long BYD and short GAC and Zhongsheng. Maintain UNDERWEIGHT. Top picks: BYD, CATL, NXS and Minth. Results Alibaba Group (9988 HK/BUY/HK$95.15/Target: HK$151.00) 3QFY23: Solid earnings beat; consumer sentiment picked up since Feb 23. Galaxy Entertainment Group (27 HK/HOLD/HK$51.90/Target: HK$51.10) 4Q22: EBITDA loss narrowed; tapping the premium-led recovery momentum. Hong Kong Exchanges and Clearing...
NEH NETEASE INC. SPONSORED ADR
A117ME ALIBABA GROUP HOLDING LTD. SPONSORED ADR
00016 SUN HUNG KAI PROPERTIES LIMITED
00388 HONG KONG EXCHANGES & CLEARING LTD.
00027 GALAXY ENTERTAINMENT GROUP LIMITED
02689 NINE DRAGONS PAPER HOLDINGS LTD.
9988 ALIBABA (9988 HK)
9999 HK NETEASE INC
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