[ET Net News Agency, 13 January 2020] UBS Global Research lowered its target price for
Hysan Development Company (00014) to HK$26.6 from HK$31.1 and downgraded its rating from
"neutral" to "sell".
The research house believes investors are overly optimistic about the potential retail
sales recovery, similar to Wharf REIC (01997). UBS believes the market has not priced in
prolonged retail downcycle for the next three years.
However, trading at a 48% discount to NAV, the current valuation still does not price in
the potential downside earnings risk from a prolonged retail/office downcycle. UBS
forecast Hysan's earnings to decline 5%/1% in 2020/2021. (KL)