[ET Net News Agency, 2 November 2020] Goldman Sachs raised its target price for Hang
Lung Properties (HLP) (00101) by 29% to HK$25.2 and upgraded its rating to "buy" from
"neutral".
The research house said in recent months, the development of China's retail market has
trended above its earlier thesis (V-shape recovery once the environment stabilizes), and
has already shown positive growth on the back of the repatriation of spending.
Goldman noted total retail sales were up by 13.7% (proxied by 437 large commercial
enterprises) in Shanghai during the Oct Golden Week this year. For HLP, Goldman expects
the full operations of its Gateway 66 in Shanghai (post AEI) to enjoy this aforementioned
growth in spending especially on a year-on-year basis.
It looks for a 9% rental CAGR between FY2019 to FY2022, driven by a 6% decline from HK
and a 19% increase from Mainland China. After factoring in the latest sector growth
assumptions, Goldman raised its FY2020-22 EPS forecasts by 3% to 15%. (KL)