Core Viewpoint - Goldman Sachs has downgraded Link REIT's (00823) basic earnings per unit for the fiscal years 2026 to 2028 by 0% to 3%, and reduced the target price from HKD 51.1 to HKD 48.4, while maintaining a "Buy" rating, anticipating an improvement in rental trends within 12 months [1] Financial Performance - Link REIT reported a net loss of HKD 1.6 billion for the first half of fiscal year 2026, which includes a property revaluation loss of HKD 5 billion [1] - Excluding this factor, the basic profit decreased by 7.1% year-on-year to HKD 3.3 billion, accounting for 48% of the bank's full-year forecast [1] - The decline in income from the Hong Kong and mainland leasing portfolio and significant reductions in renewal rents contributed to this performance, alongside one-time severance costs and other related expenses from a cost structure optimization plan [1] Future Outlook - Management remains cautiously optimistic about the retail leasing outlook in Hong Kong, noting signs of improvement in tenant sales and foot traffic [1] - However, management anticipates further deterioration in renewal rents in the second half of fiscal year 2026, as rental trends typically lag behind sales performance [1] - Link REIT is considering the acquisition of three shopping malls in Australia, with management highlighting the value of investing in the Australian retail market, given their existing properties in Sydney [1] - The company emphasizes strict financial control and aims for returns above established benchmarks, with sufficient liquidity to complete the acquisition [1]

Core Viewpoint - Goldman Sachs has downgraded the basic earnings per fund unit of Link REIT (00823) for the fiscal years 2026 to 2028 by 0% to 3%, with the target price reduced from HKD 51.1 to HKD 48.4, while maintaining a "Buy" rating [1] Financial Performance - Link REIT reported a net loss of HKD 1.6 billion for the fiscal year 2026, which includes a property revaluation loss of HKD 5 billion [1] - Excluding this factor, the basic profit decreased by 7.1% year-on-year to HKD 3.3 billion, accounting for 48% of Goldman Sachs' full-year forecast [1] Rental Trends - The decline in rental income from the Hong Kong and mainland China leasing portfolio was significant, along with a substantial reduction in renewal rental rates [1] - Management remains cautiously optimistic about the retail leasing outlook in Hong Kong, noting improvements in tenant sales and foot traffic [1] Future Outlook - Despite signs of improvement, management anticipates further deterioration in renewal rental rates in the second half of the fiscal year 2026 due to the lagging nature of rental trends compared to sales performance [1] - Link REIT is considering the acquisition of three shopping malls in Australia, with management highlighting the value of investing in the Australian retail market [1] Financial Strategy - Management emphasized strict financial control and the pursuit of returns above established benchmarks [1] - Goldman Sachs believes that Link REIT has sufficient liquidity to complete the proposed acquisition [1]