[ET Net News Agency, 7 January 2021] J.P. Morgan lifted its target price for Hang Lung
Properties (00101) to HK$20.8 from HK$20.5 but downgraded its rating to "neutral" from
"overweight".
The research house said the repatriation of consumption to onshore China has been the
thematic for the stock since early 2019 and the China domestic luxury consumption story
has been boosted by COVID-19 when all China outbound tourist spending was kept onshore.
JPM believes this positive thematic has been blown a bit out of proportion and that the
market probably needs a pause to adjust its expectations. The strengthening of the RMB in
most of 2020 was not really tested against the overall government's policy direction of
encouraging consumption to move onshore.
The real test will come when China reopens travel with other countries to see if the
growth in luxury sales normalizes. JPM likes the overall improvement in Hang Lung
Properties' execution and the operating improvement across all its shopping malls. Given
the strong stock outperformance in 2020, it believes investors should take profits and
await further clarity on the macro front. (KL)