HSBC: Raises KERRY PPT target price to 24.1 yuan, maintains "Buy" rating; high-end residential sales performance is impressive

HSBC Global Research report points out that with KERRY PPT (00683.HK) about to launch its Shanghai residential project Jinling Huating Phase II, its contract sales may reach a new high this year. HSBC believes that despite the weakness in the leasing business, the improved cash flow outlook indicates high dividend potential, maintaining a "Buy" rating for the stock, with the target price raised from HKD 22.6 to HKD 24.1, implying an upside of about 11%.

HSBC Research stated that the company is about to launch Jinling Huating Phase II, estimating that its overall contract sales will reach a ten-year high of approximately HKD 30 billion by 2025, which should translate into better profit prospects. Although the bank believes that its leasing business will continue to be under pressure, short-term profits may remain stable, the improved cash flow outlook from property sales and high dividend potential may attract investors, especially with its expected 6.2% dividend yield in 2026 aligning with the interest rate cut cycle.

The bank has lowered KERRY PPT's profit forecasts for the next two years by 18.1% and 4.2%, respectively, to reflect higher average selling price assumptions, the timing of high-end residential sales recognition, and higher marketing costs, while the profit forecast for 2027 remains largely unchanged