UBS: HIBOR Recovery Could Lead to Short-Term Adjustments for Developers
HIBOR Impact on Real Estate: The recent rise in HIBOR is expected to cause a short-term decline in Hong Kong's real estate sector, according to a UBS report.
Future HIBOR Projections: UBS forecasts that HIBOR will stabilize between 2% and 2.5% by the end of Q3 2025, predicting rates of 2.2% by the end of 2025 and 1.6% by the end of 2026.
Investment Strategy: UBS recommends a defensive investment approach until mid-September, favoring homebuilders with high and sustainable dividend yields like SINO LAND and LINK REIT.
Underperforming Developers: Other developers with lower dividend yields or higher net gearing, such as CK ASSET and WHARF HOLDINGS, are expected to underperform in the current market conditions.
Trade with 70% Backtested Accuracy
Analyst Views on 00004
About the author
<BofAS Analysis> Ratings and Target Prices for Hong Kong Property Developers and Landlords (Table)
Property Developers Performance: Various property developers showed mixed performance with SHK PPT and Henderson Land rated as neutral, while CK Asset and Sino Land received buy ratings. New World Development was rated underperform.
Landlords Overview: Hysan Development and Swire Properties experienced declines, but all listed landlords, including Wharf REIC and Hang Lung Properties, received buy ratings, indicating positive market sentiment.
REITs Market Status: LINK REIT saw a significant increase in share price and was rated a buy, reflecting optimism in the REIT sector.
Conglomerates Insights: MTR Corporation and CKH Holdings were rated underperform and buy respectively, with short selling activity indicating varying investor confidence in these conglomerates.
M Stanley Predicts 10% Increase in Home Prices and 5% Rise in Rents This Year, Recommends SHKP, CKA, and Henderson
Market Outlook: Morgan Stanley forecasts a 10% increase in Hong Kong home prices and a 5% rise in rents for the year, while expecting increased stock price volatility ahead of earnings releases.
Preferred Stocks: The broker favors SHK PPT, CK ASSET, and HENDERSON LAND, all rated Overweight, while avoiding WHARF HOLDINGS and NEW WORLD DEV, which are rated Underweight.
Mainland Influence: Joseph Tsang from JLL highlighted that strong purchasing power from mainland buyers is expected to drive a 5% increase in home prices this year, following a market bottom last year.
Market Dynamics: Interest rate cuts and favorable capital market conditions may boost the property market, although geopolitical risks and macro uncertainties could exert downward pressure.
Citi Anticipates Increased EPS Growth for HK Developers in 2026-2027, Suggests SHK PPT, SINO LAND, and More
Citi Research Insights: Citi Research highlights that investors are focusing on the potential upside of the Hong Kong real estate market for 2026-2027, despite last year's subdued performance, with a polarized rental outlook between luxury homes and office spaces.
Developer vs. Landlord Potential: The report suggests that developers may have greater earnings per share (EPS) upside compared to landlords, benefiting from improved profit margins and new land acquisitions.
Stock Recommendations: Recommended stocks include SHK PPT, SINO LAND, and HANG LUNG PPT, while UBS has made adjustments to its top picks, adding SINO LAND and removing HENDERSON LAND.
Dividend Outlook: The report indicates stable dividends for several companies, with SWIREPROPERTIES and Hongkong Land aiming for mid-single-digit growth, while LINK REIT and others may see a decrease in dividend per unit (DPU) due to negative rental growth.
Citi's Ratings and Target Prices for Hong Kong Developers (Table)
Stock Performance Overview: Various Hong Kong stocks showed mixed performance, with WHARF HOLDINGS and MTR CORPORATION experiencing slight gains, while HENDERSON LAND and NEW WORLD DEV saw declines.
Short Selling Data: Significant short selling activity was noted across several stocks, with HENDERSON LAND leading at $77.95M and a ratio of 26.874%, indicating bearish sentiment among investors.
Analyst Ratings: Analysts have mixed ratings for the stocks, with HYSAN DEV and SHK PPT receiving "Buy" ratings, while WHARF HOLDINGS and NEW WORLD DEV are rated as "Sell."
Market Predictions: CLSA predicts a 5% rise in Hong Kong home prices this year, favoring Hysan and Link REIT as preferred investments.
Citi Research: Optimistic Investor Attitude Towards Hong Kong Real Estate, Prefers SHK PPT and HANG LUNG PPT
Investor Sentiment: Citi's research shows positive sentiment towards Hong Kong real estate, with a preference for property developers and Central office over luxury retail, while non-discretionary retail is underperforming.
Stock Performance: Investors favor SHK PPT, with notable short selling activity in Hongkong Land, HANG LUNG PPT, and SWIREPROPERTIES, indicating mixed confidence in these stocks.
Divided Opinions: There are varied opinions on SINO LAND, HENDERSON LAND, and HYSAN DEV, with some stocks receiving underweight targets, including LINK REIT and WHARF REIC.
Limited Discussion: Other developers like CK ASSET and KERRY PPT have limited discussion, with varying short selling ratios reflecting differing investor confidence.
Citi's Projections for Ratings, Target Prices, and Valuations of HK Real Estate Stocks (Table)
Stock Performance: Various Hong Kong stocks showed mixed performance, with some companies like Henderson Land and Hysan Development experiencing gains, while others like Wharf REIC and Champion REIT saw declines.
Short Selling Data: Significant short selling activity was noted across multiple stocks, with SHK PPT and Wharf Holdings having the highest short selling ratios, indicating bearish sentiment among investors.
Investment Ratings: Analysts provided investment ratings, recommending buys for several stocks including Hysan Development and Sino Land, while suggesting sells for Wharf Holdings and New World Development.
Discount to NAV: Many stocks are trading at substantial discounts to their net asset values (NAV), with Kerry Properties and Hang Lung Properties showing the largest discounts at 74% and 68%, respectively.
<BofAS Analysis> Ratings and Target Prices for Hong Kong Property Developers and Landlords (Table)
Property Developers Performance: Various property developers showed mixed performance with SHK PPT and Henderson Land rated as neutral, while CK Asset and Sino Land received buy ratings. New World Development was rated underperform.
Landlords Overview: Hysan Development and Swire Properties experienced declines, but all listed landlords, including Wharf REIC and Hang Lung Properties, received buy ratings, indicating positive market sentiment.
REITs Market Status: LINK REIT saw a significant increase in share price and was rated a buy, reflecting optimism in the REIT sector.
Conglomerates Insights: MTR Corporation and CKH Holdings were rated underperform and buy respectively, with short selling activity indicating varying investor confidence in these conglomerates.
M Stanley Predicts 10% Increase in Home Prices and 5% Rise in Rents This Year, Recommends SHKP, CKA, and Henderson
Market Outlook: Morgan Stanley forecasts a 10% increase in Hong Kong home prices and a 5% rise in rents for the year, while expecting increased stock price volatility ahead of earnings releases.
Preferred Stocks: The broker favors SHK PPT, CK ASSET, and HENDERSON LAND, all rated Overweight, while avoiding WHARF HOLDINGS and NEW WORLD DEV, which are rated Underweight.
Mainland Influence: Joseph Tsang from JLL highlighted that strong purchasing power from mainland buyers is expected to drive a 5% increase in home prices this year, following a market bottom last year.
Market Dynamics: Interest rate cuts and favorable capital market conditions may boost the property market, although geopolitical risks and macro uncertainties could exert downward pressure.
Citi Anticipates Increased EPS Growth for HK Developers in 2026-2027, Suggests SHK PPT, SINO LAND, and More
Citi Research Insights: Citi Research highlights that investors are focusing on the potential upside of the Hong Kong real estate market for 2026-2027, despite last year's subdued performance, with a polarized rental outlook between luxury homes and office spaces.
Developer vs. Landlord Potential: The report suggests that developers may have greater earnings per share (EPS) upside compared to landlords, benefiting from improved profit margins and new land acquisitions.
Stock Recommendations: Recommended stocks include SHK PPT, SINO LAND, and HANG LUNG PPT, while UBS has made adjustments to its top picks, adding SINO LAND and removing HENDERSON LAND.
Dividend Outlook: The report indicates stable dividends for several companies, with SWIREPROPERTIES and Hongkong Land aiming for mid-single-digit growth, while LINK REIT and others may see a decrease in dividend per unit (DPU) due to negative rental growth.
Citi's Ratings and Target Prices for Hong Kong Developers (Table)
Stock Performance Overview: Various Hong Kong stocks showed mixed performance, with WHARF HOLDINGS and MTR CORPORATION experiencing slight gains, while HENDERSON LAND and NEW WORLD DEV saw declines.
Short Selling Data: Significant short selling activity was noted across several stocks, with HENDERSON LAND leading at $77.95M and a ratio of 26.874%, indicating bearish sentiment among investors.
Analyst Ratings: Analysts have mixed ratings for the stocks, with HYSAN DEV and SHK PPT receiving "Buy" ratings, while WHARF HOLDINGS and NEW WORLD DEV are rated as "Sell."
Market Predictions: CLSA predicts a 5% rise in Hong Kong home prices this year, favoring Hysan and Link REIT as preferred investments.
Citi Research: Optimistic Investor Attitude Towards Hong Kong Real Estate, Prefers SHK PPT and HANG LUNG PPT
Investor Sentiment: Citi's research shows positive sentiment towards Hong Kong real estate, with a preference for property developers and Central office over luxury retail, while non-discretionary retail is underperforming.
Stock Performance: Investors favor SHK PPT, with notable short selling activity in Hongkong Land, HANG LUNG PPT, and SWIREPROPERTIES, indicating mixed confidence in these stocks.
Divided Opinions: There are varied opinions on SINO LAND, HENDERSON LAND, and HYSAN DEV, with some stocks receiving underweight targets, including LINK REIT and WHARF REIC.
Limited Discussion: Other developers like CK ASSET and KERRY PPT have limited discussion, with varying short selling ratios reflecting differing investor confidence.
Citi's Projections for Ratings, Target Prices, and Valuations of HK Real Estate Stocks (Table)
Stock Performance: Various Hong Kong stocks showed mixed performance, with some companies like Henderson Land and Hysan Development experiencing gains, while others like Wharf REIC and Champion REIT saw declines.
Short Selling Data: Significant short selling activity was noted across multiple stocks, with SHK PPT and Wharf Holdings having the highest short selling ratios, indicating bearish sentiment among investors.
Investment Ratings: Analysts provided investment ratings, recommending buys for several stocks including Hysan Development and Sino Land, while suggesting sells for Wharf Holdings and New World Development.
Discount to NAV: Many stocks are trading at substantial discounts to their net asset values (NAV), with Kerry Properties and Hang Lung Properties showing the largest discounts at 74% and 68%, respectively.
