HSBC expects Hong Kong property prices to rise by 5% next year and raises the target prices of multiple real estate stocks
HSBC Securities expects Hong Kong's property prices to rise by 5% annually next year, raising the target prices of multiple real estate stocks. Despite the recent decline in property prices, sales volume is starting to increase, and the wealth effect and lower borrowing costs will benefit the property market. The bank has raised the industry's target prices by an average of about 22% and adjusted the target prices of CK ASSET, SINO LAND, New World Development, MTR CORPORATION, and HANG LUNG PPT, maintaining a "buy" rating
HSBC Securities released a report stating that although property prices have been declining recently, they believe that sales volume is starting to increase. With the wealth effect coupled with lower borrowing costs, it is favorable for the property market performance. It is estimated that next year, the annual increase in property prices, originally projected at 2%, has been revised upwards to 5%.
The bank pointed out that the wealth effect is expected to boost consumption, which is good news for rental income stocks. In addition, the strengthening of the Renminbi and the Japanese Yen will weaken the willingness of Hong Kong people to consume in mainland China and Japan, benefiting related stocks.
HSBC Securities has raised the average industry target price by about 22%, mainly due to improved profitability and dividend prospects. Earnings forecasts for 2025 to 2026 have been raised by 1.3% to 1.8%.
The bank has raised the target prices of several real estate stocks, raising the target price of CK Asset (1113) from HKD 39.7 to HKD 44.6, maintaining a "buy" rating. In addition, Buy ratings have been maintained for Sino Land (083), New World Development (016), MTR Corporation (066), and Hang Lung Properties (101), with target prices raised from HKD 9.9, HKD 95.3, HKD 33.8, and HKD 6.9 to HKD 10.9, HKD 116, HKD 34.6, and HKD 10.5 respectively. (Reporter: Chen Wei)
