[ET Net News Agency, 28 July 2020] Morgan Stanley cut its target price for Fortune REIT
(00778) to HK$6.8 from HK$7.7 and downgraded its rating to "underweight" from
"equal-weight".
The research house said Fortune's interim dividend payout ratio cut from 100% to 90% was
a negative surprise as net property income (NPI) and distributable income in 1H fell only
4% and 3%, respectively.
Gearing (gross debt to assets) was still healthy at 21.6%. Management said in the
analyst briefing that it aims to preserve cash as the 2H operating environment has turned
uncertain after the recent acceleration in Covid-19.
Morgan now assumed Fortune's payout will be 100% in 2H, hence 95% for 2020. (KL)