<Midday Takeaway>HSI Down 304 pts; HSTI Down 60 pts; MEITUAN Down over 3%; JD HEALTH, CHINAHONGQIAO, CHINA RES LAND, FIT HON TENG, LK TECH Hit New Highs

The analyst rating was upgraded from Equal-weight to Outperform based on the expectation of a gradual recovery in Hong Kong's real estate market, particularly in the residential sector, followed by premium retail assets and core office spaces. BOCOM International identified key supports for this recovery, including improvements in macro uncertainties (notably interest rate cuts), substantial policy easing, and the return of fundamental demand drivers. They anticipate increases in residential rental levels and prices over the next few years, which further supports their positive outlook on specific stocks like SHK PPT and LINK REIT.

The analyst rating for SHK PPT was upgraded from Underperform to Outperform by CLSA due to several factors: the significant increase in the price list for Cullinan Sky (Phase 2) compared to Phase I, the rebound of Hong Kong property prices by 4% from their low, and the forecasted 5% increase in property prices by 2026. Additionally, the easing of selling pressure and strong rental demand, supported by a US interest rate cut, are expected to benefit leading developers like SHK PPT. Consequently, CLSA raised its target price for the company from $63.6 to $110.

The analyst rating for SHK PPT was downgraded from Buy to Neutral by UBS due to a more balanced risk-reward scenario. While the company has benefited from the recovery in the residential market and its stock price has increased by 29% year-to-date, UBS noted that the dividend yield remains below 4%, indicating limited room for growth in dividend per share for FY26. This combination of factors led to the downgrade.