Citi published a report on Hong Kong property stocks, noting that earnings for the fiscal year 2025 will benefit from reduced interest costs. The bank also views listed companies’ guidance for the fiscal year 2026 as highly encouraging: predictable returns on property sales deposits driven by years of rising home prices, prime office buildings benefiting from leasing momentum with smaller rent reductions, and positive recovery trends in mainland China’s high-end retail sector. Citi believes that dividends from Sun Hung Kai Properties (00016.HK) and Hongkong Land signal an upcoming upcycle, supported by rapidly recovering profit margins from development properties and strong yields from investment properties.
The bank attributes this month’s pullback in property stocks primarily to profit-taking after the rally, alongside some selling pressure amid interest rate and macroeconomic uncertainties. Nevertheless, the sector’s fundamentals have strengthened this year, and the bank expects accelerated supplementary investments geared towards long-term growth. The bank is selecting stocks showing growth in both earnings per share and shareholder returns. Its top picks are Sun Hung Kai Properties, Cheung Kong Property Holdings (01113.HK), and Swire Properties (01972.HK).
The table below shows Citi’s latest investment ratings and target prices for Hong Kong property stocks:
Stock│Investment Rating│Target Price
Wharf Holdings (00004.HK)│Sell│HKD 21.15
Henderson Land (00012.HK)│Buy│HKD 35.32
Hysan Development (00014.HK)│Buy│HKD 24.30
Sun Hung Kai Properties (00016.HK)│Buy│HKD 168.00
New World Development (00017.HK)│Neutral│HKD 11.32
MTR Corporation (00066.HK)│Sell│HKD 30.00
Sino Land Company (00083.HK)│Buy│HKD 14.20
Henderson Land (00101.HK)│Buy│HKD 11.2
Kerry Properties (00683.HK) │ Buy │ HKD 23.2
Fortune REIT (00778.HK)│Buy│HKD 6.0
Link REIT (00823.HK) │ Neutral │ HKD 36.8
CK Asset Holdings (01113.HK)│Buy│HKD 54.8
Swire Properties (01972.HK)│Buy│HKD 28.8
Wharf Real Estate Investment Company (01997.HK)│Buy│HKD 31.6
Champion REIT (02778.HK)│Sell│HKD 2.03
