＜Research＞HSBC Lowers HK Developers TPs, Expects Div. Cut Cycle May be Over

　　The profitability of Hong Kong's property developers is expected to deteriorate as a result of the price reset of new launches and potential asset write-offs, HSBC Global Research issued a research report saying.

　　However, the outlook for sales and earnings should improve due to more aggressive project launches.

　　Related NewsWHARF HOLDINGS Expects 1H24 Loss $2.5B-$2.8B; Revaluation Loss on Non-cash & Unrealised Items

　　Yet, some Hong Kong developers, such as SHK PPT (00016.HK) -0.050 (-0.072%) Short selling $29.58M; Ratio 29.594% and WHARF HOLDINGS (00004.HK) -1.700 (-6.897%) Short selling $1.44M; Ratio 48.050% , are expected to return to profit growth in the next 12 months.

　　HSBC Global Research also highlighted Buy-rated companies such as HANG LUNG PPT (00101.HK) +0.020 (+0.315%) Short selling $8.31M; Ratio 32.060% , SWIREPROPERTIES (01972.HK) +0.200 (+1.597%) Short selling $5.17M; Ratio 9.820% , LINK REIT (00823.HK) +0.600 (+1.846%) Short selling $78.82M; Ratio 30.027% and FORTUNE REIT (00778.HK) +0.050 (+1.340%) Short selling $221.90K; Ratio 7.545% , with 12-month forward dividend yields of 8% or above, and a stable or growing dividend outlook.

　　Nevertheless, HSBC Global Research believed that some Hong Kong developers are at risk of sustained decline in core earnings, such as NEW WORLD DEV (00017.HK) +0.040 (+0.550%) Short selling $5.27M; Ratio 47.992% and HENDERSON LAND (00012.HK) +0.150 (+0.676%) Short selling $8.11M; Ratio 24.184% .

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　　HSBC Global Research lowered its target prices for Hong Kong property developers by an average of 4.2%, and reduced its 2024-2026 earnings forecasts by 2-3.2%. The latest ratings and target prices of the sector are listed in a separate table.

　　In addition, HSBC Global Research expected that the cycle of dividend cut may be coming to an end for Hong Kong's property developers. The broker believed that the share prices of Hong Kong property developers have started to reflect the higher likelihood of rate cuts in 2H24.

　　(HK stocks quote is delayed for at least 15 mins.Short Selling Data as at 2024-07-29 12:25.)

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