Morgan Stanley lowered its target price for Wharf REIC (01997) to HK$28 from HK$30 and maintained its "underweight" rating.
The research house said Wharf REIC's 1H results miss, and Morgan sees further downside risk in 2H. Morgan lowered its 2020-21 DPS estimates by 7%, which reflects lower retail occupancy, further rent concessions, and lower hotel profits. It expects 2H DPS to decline 4% HoH and 19% YoY, to HK$0.75.
Morgan estimated average malls' occupancy to decline at least 3ppt HoH in 2H. As of June 2020, occupancy was 90% at Harbour City and 92% at Times Square.
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