＜Research＞UBS Downgrades HANG LUNG PPT, CR MIXC to Neutral, Citing Slowing Luxury Retail Sales in CN

　　Citing the latest industry data, UBS noted in a report that the downturn in the mainland property market and wage cuts in the financial sector have weighed on Chinese luxury spending. Sales of luxury goods in China have fallen by about 10% so far this year, with the decline increasing from May to June, and it is expected that luxury brands may slow down the pace of opening shops in China between 2H24 and 2026. Malls may need to reduce rents to retain luxury brand tenants, or transform into daily life malls.

　　The broker pointed out that high-end shopping malls are expected to face some rental pressure as the construction cycle of shopping centres focusing on high-end spending takes at least four years. Considering the possibility of slower earnings growth, UBS downgraded its rating on CHINA RES MIXC (01209.HK) -0.200 (-0.844%) Short selling $24.81M; Ratio 22.513% from Buy to Neutral accordingly, with its target price axed from $42 to $24.5.

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　　UBS also downgraded HANG LUNG PPT (00101.HK) +0.020 (+0.298%) Short selling $8.33M; Ratio 20.081% from Buy to Neutral and halved its target price from $14 to $7, citing slower revenue growth and a lower dividend forecast.

　　The broker meanwhile maintained its Buy rating on SWIREPROPERTIES (01972.HK) -0.040 (-0.309%) Short selling $23.90M; Ratio 31.291% , which has a more sustainable dividend yield of 9% and a low net gearing ratio of around 13%. The broker believed it is well-positioned in the sector to benefit from potential interest rate cuts. The broker nevertheless reduced its price from $23.3 to $17.2.

　　(HK stocks quote is delayed for at least 15 mins.Short Selling Data as at 2024-07-22 16:25.)

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