Morgan Stanley·2026-03-04 09:40Investment Rating - The report assigns a "Market Perform" rating to the company with a target price of HKD 10.6 [1] Core Insights - The company's performance for the first half of the fiscal year 2026 met expectations, with a basic profit of approximately HKD 2.22 billion, while basic earnings per share decreased by 6.3% year-on-year to HKD 0.24 due to an expanded share base [1] - The interim dividend remains unchanged at HKD 0.15, and the report anticipates that the option for scrip dividends may cease in the short term, with potential announcements for share buybacks and increased dividends during the final earnings report [1] - As of the end of last year, the company's net cash increased by HKD 1.9 billion to HKD 51.4 billion, primarily due to increased property sales receipts [1] - Interest income declined by 14% year-on-year, influenced by a drop in Hong Kong interbank offered rates [1] - The report highlights a strong momentum in the physical market with recorded sales of HKD 6.4 billion for the first half of fiscal year 2026 and HKD 1.5 billion in contract sales year-to-date [1] - It is expected that the profit margin for residential property development may have bottomed out, with unrecognized sales amounting to HKD 4.6 billion and anticipated higher profit margins from land acquired post-2023, estimated to reach high single digits [1]