Zhi Tong Cai Jing·2026-02-02 04:10Core Viewpoint - Citigroup maintains a "Buy" rating for Hang Lung Properties (00101) and raises the target price from HKD 10.1 to HKD 11.2, citing potential upside in the company's same-store sales growth (SSSG) target of approximately 5% to 7% for 2026 [1] Group 1: Sales Growth and Performance - The company is expected to achieve a historical high SSSG growth of 18% year-on-year in Q4 2025, driven by an enriched non-luxury product mix, the opening of new flagship stores in the second half of 2025, and initiatives to attract foot traffic and enhance customer retention [1] - The forecasted compound annual growth rate (CAGR) for the company's earnings from 2026 to 2028 is projected to be 4.5%, primarily supported by an anticipated 5% increase in retail rents and over RMB 1 billion in revenue from retail and office projects in Hangzhou expected to commence full operations by 2029, contributing approximately 10% to rental income [1] Group 2: Financial Outlook and Dividend Policy - Despite a slight expected decline of 1% in earnings for 2026 due to decreased capitalized interest, the company is positioned to offer pure cash dividends starting in 2026, with an anticipated yield of around 5.6% as debt ratios and capital expenditures gradually decrease while rental income continues to grow [1] - The current CEO is set to retire in August 2026 and will transition to an advisory role, with the company actively seeking a successor [1]