[ET Net News Agency, 7 January 2021] J.P. Morgan raised its target price for Champion
REIT (02778) to HK$4.8 from HK$4.02 and upgraded its rating to "overweight" from
"underweight".
The research house said Champion's yield spread against the U.S. 10-year has widened to
451bps compared to the historical average of 361bps. While its two assets have been among
the most affected by COVID-19, JPM thinks the marginal improvement could also be most
imminent, along with its base-case expectation of a certain degree of re-opening toward
end-1H 2021.
On the other hand, the company has a marked-to-market gain of 40% as of end-2020 for the
Union Medical Healthcare shares (02138) it subscribed to. On the back of an undemanding
valuation (0.46x P/B), JPM thinks there will be an upside to the stock once the COVID-19
momentum eases along with the distressed office segment. (KL)