WHARF REIC(HK:01997) Zhi Tong Cai Jing·2025-10-08 09:13Core Viewpoint - UBS has raised the target price for Wharf Real Estate Investment Company (01997) to HKD 23, maintaining a "Neutral" rating, citing ongoing long-term headwinds despite recent stabilization in Hong Kong retail sales [1] Group 1: Market Performance - Wharf Real Estate's stock price has increased by 13% year-to-date, driven by a decline in HIBOR and stabilization in retail sales [1] - UBS expects a rebound in retail sales and profit growth, projecting an increase of 2% to 9% for the years 2025 to 2026 [1] Group 2: Long-term Challenges - Long-term challenges persist, primarily due to the rebound in outbound tourism from Hong Kong, more convenient tax refund arrangements in mainland China, and intensified competition among high-end shopping malls [1] - UBS believes that the recent retail sales rebound is likely to be temporary, with discretionary spending facing pressure after the National Day Golden Week [1] Group 3: Financial Projections - Based on HIBOR assumptions, UBS has adjusted its earnings per share estimates for Wharf Real Estate for the years 2025 to 2027 upwards by 4% to 8% [1] - The firm maintains a cautious outlook, predicting that retail sales in Hong Kong are unlikely to see strong growth in the next two years, expecting them to remain nearly flat [1]