Core Viewpoint - Bank of America Securities maintains a "Neutral" rating on Sun Hung Kai Properties (00016) due to its fiscal year 2025 performance being slightly below expectations [1] Group 1: Company Performance - The company is benefiting from a rebound in the Hong Kong residential market, but the low profit margin from property development may keep short-term earnings per share and dividends flat [1] - The target price for Sun Hung Kai Properties has been slightly increased from HKD 94 to HKD 95 [1] Group 2: Earnings Forecast - The earnings per share forecast for fiscal years 2026 to 2027 has been adjusted downwards by 1% to 4% due to changes in property sales recognition timing [1] - Unless there is a significant increase in Hong Kong property prices in the short term, earnings per share for fiscal years 2026 to 2027 are expected to remain relatively flat [1] Group 3: Market Comparison - Compared to peers with a 4% yield level, the company’s yield compression potential is considered limited [1]

Core Viewpoint - Morgan Stanley's research report indicates that Sun Hung Kai Properties' annual earnings per share remained flat, with dividends meeting expectations and a payout ratio maintained at 50%, resulting in a dividend yield of 4.1% [1] Financial Performance - The company's contract sales for local property development in Hong Kong reached HKD 42.3 billion, compared to HKD 25.6 billion in the same period last year [1] - The property development profit margin decreased to 12%, down from 26% in the previous year [1] - Morgan Stanley anticipates that Sun Hung Kai Properties will record over HKD 30 billion in unrecognized sales for the fiscal year 2026, with a similar profit margin [1] Market Outlook - Despite negative growth in renewal rents, the company maintains a constructive outlook on the Hong Kong office and retail market [1] - For the fiscal years 2026 to 2027, significant revenue growth is expected from investment properties at the Kowloon High-Speed Rail Station and Shanghai Xujiahui Center [1] Investment Recommendation - Morgan Stanley has set a target price of HKD 102.3 for Sun Hung Kai Properties, with a rating of "Overweight" [1]

Core Viewpoint - Hong Kong MTR Corporation reported a mixed performance for the first half of 2025, with total revenue declining by 6.5% year-on-year to HKD 27.4 billion, while net profit attributable to shareholders increased by 27.5% to HKD 7.709 billion, driven by significant growth in property development profits [1] Group 1: Financial Performance - Total revenue for 1H25 was HKD 27.4 billion, a decrease of 6.5% year-on-year [1] - Net profit attributable to shareholders reached HKD 7.709 billion, up 27.5% year-on-year [1] - Regular business profit was HKD 3.391 billion, down 15.7% year-on-year, while property development profit surged to HKD 5.542 billion, an increase of 218.5% [1] - Fair value loss on investment properties amounted to HKD 1.224 billion, compared to a gain of HKD 0.28 billion in 1H24 [1] Group 2: Operational Insights - Hong Kong's rail operations generated revenue of HKD 11.5 billion, a year-on-year increase of 3.3%, but EBIT fell by 76% to HKD 0.98 billion due to rising employee costs and inflation [2] - The company plans to increase ticket prices by approximately 3% in the 2024/25 fiscal year, but will freeze prices in 2025/26, expecting ticket prices to remain stable in the second half of 2025 [2] - New rental agreements for station shops and malls saw declines of 7.0% and 7.8% respectively, reflecting a lag in retail recovery [3] Group 3: Property Development - Property development profits reached HKD 5.542 billion, primarily driven by projects in Ho Man Tin and South Island, with a significant year-on-year increase of 218.5% [4] - The private residential price index in Hong Kong showed signs of recovery, with a cumulative increase of 0.6% in the second quarter of 2025 [4] - The company anticipates a peak in capital expenditures, projecting HKD 140 billion for new railway projects from 2023 to 2034 [4] Group 4: Profit Forecast and Valuation - The company revised its net profit forecasts for 2025-2027 down by 11%, 3%, and 17% to HKD 18.1 billion, HKD 21 billion, and HKD 11 billion respectively [4] - The target price was adjusted to HKD 29.9 from HKD 31.9, based on a discounted cash flow (DCF) valuation and a capitalization rate for investment properties [4]

Core Insights - The company's net profit attributable to shareholders increased by 27.5% to HKD 7.709 billion, but profit from recurring operations declined by 15.7% to HKD 3.391 billion, indicating a shift in the profit structure with property development becoming the main driver of overall performance [1] Financing and Investment - The company conducted two large-scale public financings in the first half of 2025, raising a total of USD 6 billion to support its infrastructure investment plans, including a record USD 3 billion bond issuance in March [3] - The funds raised will support approximately HKD 140 billion in new railway projects and HKD 65 billion for railway facility updates and maintenance from 2023 to 2027 [3] New Railway Projects - The company made significant progress in new railway projects, signing an agreement with the government for the Northern Link (Phase 1) project, which will enhance connectivity between Hong Kong and Shenzhen [4] - The company plans to open the main line and branch line of the Northern Link by 2034, reflecting its commitment to government policies and innovative thinking [4] - Ongoing construction projects include various extensions and new stations, but the company faces challenges in managing construction impacts on existing operations and communities [4] Operational Performance - The company maintained a high service level with a 99.9% punctuality rate in passenger journeys during the first half of 2025, and ticket prices will remain unchanged for the 2025/2026 fiscal year [6] - The property development segment contributed significantly to profit growth, with ongoing projects expected to provide around 9,000 residential units [6] - However, the company faces multiple challenges, including geopolitical uncertainties, inflation, and changing passenger behaviors post-COVID-19, which may affect ridership and advertising revenue [6]

2022 FINAL RESULTS | ANALYST BRIEFING 9TH MARCH 2023 DISCLAIMER This presentation has been prepared by Swire Properties Limited (the "Company", and together with its subsidiaries, the "Group") solely for information purposes and the information contained herein has not been independently verified. No representation or warranty, express or implied, is made as to, and no reliance should be placed on, the accuracy, fairness, completeness, reasonableness or correctness of the information or opinions presented h ...