[ET Net News Agency, 16 January 2018] Morgan Stanley lifted its target price for Sun
Hung Kai Properties (SHKP)(00016) by 4% to HK$153, and maintained its "overweight" rating.
The research house said SHKP continues to have a healthy sales pipeline of around 4K
units, which could be worth HK$54bn, versus HK$48bn contracted sales made in CY2017. Key
projects include Cullinan West II, Victoria Harbour and the Pak Shek Kok project.
Morgan expects SHKP to grow its dividend at a 10% CAGR over the next three years. By
keeping the payout ratio at around 45% of its underlying profit, the research house
estimated SHKP's DPS to grow on the back of increasing property sales from Hong Kong and a
steady increase in rental income.
It increased its EPS estimates by 7%/6% for FY2019/20, reflecting (1) Quicker than
expected property sales in Hong Kong for projects such as Cullinan West Phase I and II in
West Kowloon and Wings at Sea in Lohas Park; (2) Higher transacted prices for projects
launched in recent months such as the latest phase of Cullinan West and Victoria Harbour
(North Point). Earnings expectations for FY2018 fall marginally due to slower progress on
China property sales. (KL)