[ET Net News Agency, 21 March 2018] Morgan Stanley cut its target price for SOHO China
(00410) to HK$4.1 from HK$5, and downgraded its rating to "equal-weight" from "overweight"
noting management has halted the asset disposal plan.
The research house said it had been positive on SOHO China since November 2016. Its
thesis was that asset disposals (there were two in the pipeline) would narrow its
valuation discount by unlocking asset value, and that recurring special dividends from
disposal proceeds would be a positive stock catalyst.
Management mentioned that it now considers the company's existing portfolio to be core
assets and that it prefers holding them for a longer period to enjoy asset value
appreciation. Morgan believes this change may also be a signal of deterioration in the
market environment for the sale of assets. (KL)