智通财经网·2026-02-02 07:34Core Viewpoint - Morgan Stanley believes that the ongoing recovery of tenant sales in mainland China will lead to a revaluation of Hang Lung Properties (00101), raising the target price from HKD 11.5 to HKD 12, making it one of the bank's top picks [1] Group 1: Financial Performance - The performance for the fiscal year 2025 confirms a recovery in tenant sales for Hang Lung Properties, with a year-on-year growth of 18% in Q4 2025, reaching a historical high, surpassing the 10% year-on-year growth in Q3 2025 [1] - Management anticipates a mid-single-digit percentage growth in tenant sales for the fiscal year 2026, with positive momentum continuing until January 2026 [1] Group 2: Valuation Metrics - Hang Lung Properties is currently trading at a 66% discount to net asset value, with a price-to-book ratio of 0.3 and a dividend yield of 5.5%, indicating potential upward risk starting from the fiscal year 2027 [1] - The bank considers Hang Lung Properties to be undervalued based on these metrics [1] Group 3: Market Position and Growth Drivers - Hang Lung Properties operates as a "luxury retail agent" in China, where international luxury brands are experiencing low single-digit growth, which may not seem attractive [1] - However, investors may overlook the strong growth of non-luxury brands, which account for half of tenant sales [1] - There is a perception that rental income growth is lagging behind tenant sales growth, but Morgan Stanley believes this underestimates Hang Lung Properties' efforts to convert more variable rents into fixed rents, which helps stabilize rental income during downturns [1]