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<Research>BofAS Expects HK Property Developers to Be More Cautious on Price Hikes; Most Developers' EPS Have Bottomed Out
Recommend 7 Positive 13 Negative 5 |
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Despite rising geopolitical tensions in the Middle East, Hong Kong property developers continued to raise prices in March, BofA Securities wrote in its research report. However, most new batch units were fewer in number and concentrated in urban areas. Considering the recent stock market volatility, developers may adopt a more cautious approach to price increases, especially for large new projects. In BofA Securities' opinion, the 2025 results of property stocks and conglomerates were largely in line with expectations, with most profit variations due to project accounting timing. Following profit-taking, the dividend yield of related stocks has become more attractive, and most developers' EPS likely bottomed out last year. BofA Securities is optimistic about SINO LAND (00083.HK) and LINK REIT (00823.HK). The former holds a solid net cash position, offers a dividend yield above the average level, and can capture the residential market recovery. Its target price remains at HKD13.3. The latter has potential asset disposals and share buybacks. Its target price also remains at HKD44. For investors with a higher risk appetite, they may consider HENDERSON LAND (00012.HK) and SWIREPROPERTIES (01972.HK). The former has an average annual CAGR of 9% from 2025 to 2028 and potential for farmland recovery. Its target price is HKD34.4. The latter has a rich project pipeline and stable shareholder returns. Its target price has slightly risen from HKD29 to HKD30. All of these stocks have been rated as Buy. Meanwhile, BofA Securities has reiterated an Underperform rating on NEW WORLD DEV (00017.HK) and MTR CORPORATION (00066.HK), citing the former's high leverage and financing risks and the latter's high capital expenditure. NEW WORLD DEV's target price has increased from HKD4.8 to HKD5.2. MTR CORPORATION's target price remains at HKD27. AAStocks Financial News |
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