[ET Net News Agency, 6 September 2019] HSBC Global Research said Hong Kong property
stocks have corrected by 9.5% over the past 3 months, underperforming Hang Seng Index by
8.2 ppts.
While the local economic outlook is likely to face more headwinds, the market may be too
pessimistic on the outlook for the real estate market, said the research house.
It noted that the HK government has introduced the second round of stimulus measures to
stabilise the local economy.
HSBC said the HK real estate sector is trading on an FY2019 dividend yield of over 4%
and an average 50%+ NAV discount, which are attractive valuation benchmarks.
Many developers have either slowed down the pace of their project launches or delayed
them over the past two months. HSBC believes these companies are awaiting better timing to
generate a strong sales performance - and the right timing is arriving soon.
It views office landlords as less attractive given their weak demand outlook. HSBC's key
picks among developers are SHK Properties (00016), Wheelock (00020) and Sino Land (00083).
It also likes two landlords that offer good growth visibility given solid pipelines:
Hang Lung Properties (00101) and Swire Properties (01972). (KL)