Daiwa said they see Swire Properties as a play on the theme of emergence of global plays in the HK equity market. They believe the 33% plunge in its share price in June-November was driven more by fund-flow issues related to capital exiting the HK market rather than fundamental issues about the company. This creates an attractive buying opportunity for the share.
While the research house expects SP's retail malls in HK to be affected by weakness in the HK retail market, SP's malls in China have been doing very well, with gross rental
income having already surpassed that from malls in HK since 2016.
They reaffirm the "buy" rating and 12-month TP of HK$40.30, based on a 30% discount applied to their end-2019E NAV of HK$57.60.
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