[ET Net News Agency, 7 January 2021] J.P. Morgan lowered its target price for Fortune
REIT (00778) to HK$7.5 from HK$8.6 and downgraded its rating to "neutral" from
"overweight".
The research house said Fortune was the most underperforming REIT in 2020 on the back of
its unexpected payout ratio reduction of 10pps, to 90%, at the 2020 interim results.
At current levels, JPM thinks there will be a limited upside, given the lack of
catalysts until it resumes a 100% payout, which is probably a 2H 2021 event. It does not
expect resurging sales at neighborhood malls, and Fortune is likely to have more limited
pricing power than other REITs, given the slower pace of AEI (Asset Enhancement
Initiative) and tenant trades. (KL)