【英文】J.P. 摩根报告：香港房地产：黑暗中的航行Hong Kong Property Navigating the darkness（59P）

英文研究报告 2019年09月12日 07:52 管理员

New World Development: This is the only OW developer with a residential angle. Assuming there is a 30% drop in residential prices and the rental value of its commercial properties, NWD's valuation is still highlighting upside from current levels. It is also the developer that will likely see the most substantial rental increase (HK rental base to double in FY21/22) as the Victoria Dockside has all opened and rental will gradually ramp up over the next 2-3 years. On the other hand, we believe the only type of residential projects which are still selling well is the mass market product of which NWD will have a 3,000-unit to be launched in Tai Wai early 2020. We believe the current NAV discount of 65% has priced in the lingering worries of high gearing, which could be alleviated as they launch their Tai Wai project and enbloc industrial buildings. Link REIT: Management has reiterated manifold measures to return capital to shareholders including debt repayment and special distribution, in addition to unit buyback of which the company has set a target of buying 60m shares in the current financial year. This could allow more flexibility for management amidst dynamic market conditions and if any acquisition/disposal decisions narrow their repurchase window. We are also confident in their 8-9% DPU growth with 1) on track preleasing at The Quayside, 2) strong reversions of their newly acquired China properties and 3) future acquisitions. The company is mainly operating nondiscretionary shopping malls in Hong Kong and China, which make its business less prone to the impact from economic slowdown.

We are downgrading Sino Land, Hysan, Swire Properties and Wharf REIC to UW and Kerry Prop and Wheelock to N. With the 30% and 40% decline in retail and office rental in our worst-case assumptions, it's not surprising that the retail/office landlords like Hysan, Swire Prop and Wharf REIC will feel the most negative impact on their operations. These stocks have also outperformed Hongkong Land’s valuation by a wide margin. On the developers, Kerry Prop and Sino Land are in the camp lacking catalysts in the near term; Sino also has higher residential and commercial property exposure than Kerry Prop. Although Wheelock also has more resilient mass residential exposure, given the outlook of retail and the negative impact of Wharf REIC, we believe this will weigh on Wheelock’s share price performance.