Ge Long Hui·2025-07-31 06:33Core Viewpoint - Morgan Stanley has become more optimistic about Hang Lung Properties due to signs of recovery in sales among mainland tenants, with the year-on-year decline narrowing from 7% in Q1 to 1% in Q2 [1] Group 1: Sales Performance - Management indicated that the improving trend has continued into July, maintaining a cautiously optimistic outlook for the second half of the year, expecting sales to stabilize or see slight growth [1] - This improvement aligns with recent statements from luxury brands like LVMH [1] Group 2: Investment Sentiment - Although a strong recovery is not anticipated, the signs of stabilization are sufficient to trigger a first-round re-rating [1] - The management confirmed that the annual dividend will remain unchanged and there are no plans for convertible bond issuance, alleviating concerns for two major investors [1] Group 3: Rating and Price Target - The company's rating has been upgraded from "Neutral" to "Overweight," with the target price raised from HKD 7.5 to HKD 10 [1] - The company's 6.5% dividend yield remains attractive compared to peers, and the stock has underperformed in the industry, having dropped 51% from its peak, while peers have only seen a 7% decline, indicating potential for recovery [1]