[ET Net News Agency, 29 December 2020] Citi Research raised its target price for Swire
Properties (SWP) (01972) to HK$26.3 from HK$25.6 and maintained its "buy" rating.
Despite its structural negative views on HK Grade A office, the research house likes
SWP, given (1) its 7mn square feet Island East portfolio should be more defensive than
other Central office-focused names that are seeing continuous decentralisation; (2) fast
recovery in retail sales at its China malls post-COVID-19, which should translate into
positive rental growth from 2021 onwards; (3) decent IP (investment property) pipeline in
the making will contribute additional rental revenue for 2021 onwards; and (4) it remains
active in asset recycling - sold Cityplaza One in November 2020 for HK$9.85bn - Citi
believes SWP will continue to look for more opportunities to unlock NAV discount.
With a strong commitment to steadily raise dividends, Citi expects further increase in
DPS for 2020 despite a decline in core EPS. It noted that the stock is still trading at a
decent 4% dividend yield. (KL)