[ET Net News Agency, 10 January 2020] J.P. Morgan raised its target price for Swire
Properties (01972) to HK$28.5 from HK$23.4 and upgraded its rating to "overweight" from
"underweight".
The research house said HK retail accounts for less than 20% of the company's earnings
and NAV; JPM thinks the recent underperformance of the stock is overdone driven by poor
visibility in 2H 2019 and previously expensive valuation.
JPM said Swire's Island East office portfolio remains very resilient despite the overall
slowdown in office demand; leasing of Two Taikoo Place is likely to start mid-2020 and
will start providing an earnings uplift in 2021.
It also noted that Swire's retail properties in China have been performing well along
with the China domestic consumption theme. There is also a strong completion pipeline in
Beijing and Shanghai. Swire Properties is not the cheapest landlord but its management and
ESG profile are among the best quality in the sector. (KL)