Daiwa Research lifted its target price for Regal REIT (01881) to HK$1.5 from HK$1.26 and maintained its "hold" rating.
The research house said Regal REIT's lease structure specifies an aggregate minimum
floor rent of HK$400m for its five initial hotels, which offers some protection for investors.
Daiwa said it does not yet see much visibility on when tourists will return to Hong Kong, but it believes the Hong Kong hotel industry has been adapting to the "new normal", while staycations by local residents should help mitigate the impact of the downturn in tourist arrivals for hotel operators.
It does not see the risk related to hotel stocks increasing and believes that investor sentiment towards Hong Kong hotel stocks has bottomed.
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