Core Viewpoint - The report from CMB International maintains a target price of HKD 5.68 for Prosperity REIT (00778) and keeps a "Buy" rating, citing a decrease in interest expenses that is expected to lead to an increase in dividends for the year [1] Group 1: Financial Performance - Prosperity REIT's performance for the first half of 2025 is stable and largely in line with market expectations, with a slight year-on-year revenue decrease of 2% to HKD 854.5 million due to rental reductions on some assets [1] - The distributable income and distribution per unit (DPU) for the first half of 2025 increased by 2.1% and 1% year-on-year, respectively, aligning with expectations [2] Group 2: Rental and Occupancy Rates - The occupancy rate improved by 0.9 percentage points to a high level of 95% for the year, with 11 out of 17 shopping malls achieving occupancy rates above 96% [2] - The company plans to re-lease previously vacated spaces in the Prosperity Plaza, expecting further improvement in overall occupancy rates and rental recovery in the second half of the year [2] Group 3: Tenant Composition and Strategy - Approximately 72% of Prosperity REIT's tenant mix consists of essential services and daily necessities, which helps maintain resilience in the retail portfolio [2] - The company aims to optimize its tenant mix by introducing more specialty dining and new brands to mitigate the impact of pressured sectors, with expectations for overall rental stability in the second half of the year [2] Group 4: Interest Expense and Dividend Outlook - The company is expected to benefit from a decrease in HIBOR, which will help save on interest expenses for about 50% of its floating-rate debt, supporting an increase in DPU [2]
交银国际：维持置富产业信托(00778)目标价5.68港元 评级“买入”