{Market Preview}Investors can consider Link REIT

  The Hang Seng Index reported 18,930 points in the morning session, down 265 points or 1.4%. The total turnover on the main board was nearly HKD 69.8 billion. The Hang Seng China Enterprises Index reported 6,719 points, down 98 points or 1.4%. The Hang Seng Tech Index reported 3,925 points, down 67 points or 1.7%.
  The three most traded stocks on the Hang Seng Index are Tencent (00700), Alibaba (09988), and Meituan (03690). Tencent's stock is priced at HKD 382.4, down HKD 2 or 0.5%, with a turnover of HKD 3.767 billion. Alibaba's stock is priced at HKD 79.95, down HKD 3.05 or 3.7%, with a turnover of HKD 3.001 billion. Meituan's stock is priced at HKD 119.4, down HKD 1.2 or 1%, with a turnover of HKD 1.612 billion. The three most traded stocks on the Hang Seng China Enterprises Index are Kuaishou (01024), Tencent, and Alibaba. Kuaishou's stock is priced at HKD 59.1, up HKD 0.95 or 1.6%, with a turnover of HKD 3.8 billion. The three most traded stocks on the Hang Seng Tech Index are Kuaishou, Tencent, and Alibaba.

"Lee Wai Kit: Hang Seng Index is expected to struggle around 19,000 in the short term"

  The Hong Kong stock market continues to retreat, opening with a gap down of 171 points this morning, breaking below the 10-day moving average for the first time in a month. The decline further widened to over 400 points after the market opened, but the Hang Seng Index found support after falling below 18,800, and the midday decline narrowed to around 250 points. Lee Wai Kit, a director of the brokerage department at Huasheng Securities, told ET Net News Agency that the recent pullback in the Hang Seng Index is a normal correction after a cumulative gain of 3,600 points. The initial target for the retracement is the psychological level of 19,000 and it has been reached. Additionally, today's decline has cleared out the heavy positions of Hang Seng Index bull warrants, and he expects a period of struggle around the 19,000 level.
  However, he emphasized that from a technical analysis perspective, the Fibonacci retracement level of 0.382, calculated from the bottom of the previous uptrend at 16,044 to the top at 19,706, indicates that around 18,400 would be a more significant technical support level for the Hang Seng Index.

"Link REIT's consumer goods are difficult to be replaced by Mainland China consumer spending"

  Link REIT (00823) is set to announce its annual results next week. The stock price experienced a sharp drop after touching the 100-day moving average on Monday (20th) and has since fallen for three consecutive days, declining by over 10%. Yesterday, UBS released a research report with a bearish outlook, stating that Hong Kong's structural Mainland China consumer spending leads to the end of low-cost financing, and it is expected that Link REIT's annual distribution per unit will decrease by 7% each year from this year until 2027. By the fiscal year 2026, the dividend yield is forecasted to drop to 5.9%. UBS lowered the target price for Link REIT from HKD 53.9 to HKD 31.5 and downgraded the rating from "Buy" to "Sell."
  Lee Wai Kit pointed out that the trend of Mainland China consumer spending has indeed significantly impacted local businesses in Hong Kong. However, consumer goods such as daily necessities and food are still difficult to be completely replaced by Mainland China consumer spending. He expects that Link REIT's local rental income will continue to be supported. Compared to high-yield stocks like China Mobile (00941) that have already been speculated to high levels, Link REIT's dividend yield is still close to 7.5%. The current price of around HKD 33 provides a relatively defensive position, and it can be considered for investment to receive dividends.