[ET Net News Agency, 19 February 2021] Morgan Stanley lowered its target price for
Fortune REIT (00778) to HK$7.3 from HK$7.5 and maintained its "equal-weight" rating.
The research house said Fortune's full-year 2020 DPU declined 8% to HK$0.472, beating
the consensus estimate on lower interest expenses. The company raised the dividend payout
to 100% in 2H, after cutting to 90% in 1H.
Morgan reduced its 2021 DPU forecast by 3% to HK$0.44, mainly due to worse than expected
rental revenues and reversions in 2020. It expects rental reversions to be -7.5% in 2021.
However, this is partly offset by lower interest expenses as a result of HIBOR staying
low.
It expects overall HK retail sales to grow 10% in 2021 and enter a two-year recovery
cycle, and mass-end retail to be more resilient amid the rising unemployment rate. (KL)