[ET Net News Agency, 30 December 2019] Morgan Stanley lowered its target price for
Kerry Properties (00683) to HK$26 from HK$32 and downgraded its rating to "equal-weight"
from "overweight".
The research house believes Kerry faces risks to earnings, despite its high China
exposure and high yield. Morgan said the stock lacks catalysts, and Kerry is seeing slow
sell-through and rising gearing due to its China land banking. Since August 2018, the
company has spent HK$21.5bn acquiring five plots of land (three in mainland China, one in
Singapore and one in HK).
It expects consensus EPS/DPS estimates to be revised down, Kerry's dividend may at best
be flat, rising gearing (net gearing went from 19% in June 2018 to 24% by June 2019, and
Morgan expects it to increase further to 31% by December 2019 and 37% by December 2020)
and interest expenses will push earnings lower. Meanwhile, Morgan noted the lack of
product launches (mostly high-end projects in Hong Kong).
Morgan cut its underlying EPS estimates for FY2019-21 by 9%. (KL)
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00683 KERRY PPT
Nominal 
13.980 -0.080 (-0.569%) Others
30/12/2019 16:47
{I-bank focus}Morgan downgrades Kerry Properties to HK$26
| Remark: | Real time quote last updated: 18/04/2024 17:59 |
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