Core Viewpoint - Hong Kong-listed REITs, represented by Link REIT, are expected to become important investment targets for domestic investors seeking stable cash flow and optimized asset allocation due to their inclusion in the Stock Connect program [2][3][18] Group 1: Market Context - The global financial market is transitioning into a low-interest-rate environment, with the US 10-year Treasury yield around 4% and Hong Kong banks offering deposit rates between 1%-2% [2] - Domestic REITs have seen rapid growth, with 73 public REITs listed as of August 14, totaling approximately 200 billion RMB, making it the largest market in Asia [2] Group 2: Investment Highlights of H-REITs - H-REITs provide stable dividend yields ranging from 6% to 9%, significantly higher than traditional low-risk investment products [3][5] - They offer robust returns due to income primarily from rental and management fees, maintaining stability even during economic downturns [6] - H-REITs are publicly traded, providing high liquidity, allowing investors to trade like stocks [6] - They inherently possess risk diversification by investing in a variety of properties, reducing concentration risk [6] - H-REITs have good inflation-hedging properties, as real estate values and rental incomes typically rise with inflation [6] Group 3: Link REIT's Performance and Strategy - Link REIT has a property portfolio valued at 226 billion HKD, including retail, parking, office, and logistics properties, with a strong focus on major cities in China [8] - The REIT has maintained a high distribution payout, consistently distributing 100% of its distributable income, achieving an annualized return rate of nearly 11% [8] - Link REIT's average borrowing cost has decreased from 3.8% to 3.6%, improving its financing environment amid a potential interest rate decline [9] Group 4: Policy and Market Expansion - The inclusion of H-REITs in the Stock Connect program is seen as a significant milestone, enhancing market connectivity and potentially increasing liquidity and market activity [12][13] - The anticipated influx of long-term capital from index funds and high-dividend asset investors is expected to further boost market activity [13] Group 5: Resilience and Growth - Link REIT has demonstrated resilience with a rental occupancy rate of 97.8% in Hong Kong, despite structural changes in the retail sector [15] - The REIT has successfully completed over 100 asset enhancement projects since its listing, achieving an average investment return rate of 18% [17] - The property portfolio valuation has increased from 33.8 billion HKD at listing to 226 billion HKD, reflecting a growth of approximately 5.7 times over 20 years [17]

Core Viewpoint - CICC reports that the recovery of retail property asset operations in Hong Kong may be slower than expected, leading to a downward revision of Link REIT's (0823.HK) DPU forecasts for the fiscal years 2026 to 2027, maintaining an "outperform" rating and a target price of HKD 47, implying a 5.7% expected dividend yield for fiscal year 2026 [1] Group 1: Hong Kong Retail Property Market - Link REIT faces ongoing operational pressure in both Hong Kong and mainland China, with a negative single-digit growth rate in rental renewal rates for Hong Kong retail properties in Q1 of fiscal year 2026 [1] - The average rental price per square foot decreased by 0.8% to HKD 62.8, while the occupancy rate fell by 0.2 percentage points to 97.6% [1] - Merchant sales saw a year-on-year decline narrowing from 3% to 0.8%, underperforming the overall market growth of 0.4% [1] Group 2: Mainland China Property Market - Rental renewal rates for retail properties in mainland China remain under pressure, particularly for assets located in Beijing [1] - Rental rates for office and warehouse properties in mainland China continue to face downward pressure [1] Group 3: Financing and Overseas Operations - Link REIT benefits from an improved interest rate environment, with financing costs remaining at 3.6%, unchanged from the end of fiscal year 2025, and a high proportion of fixed-term debt at 67% [1] - The operational performance of overseas businesses remains strong, with occupancy rates for retail properties in Singapore and Australia nearing full occupancy, while occupancy rates for office properties in Australia remain stable [1]

Core Viewpoint - The H-share market has seen several listed REITs report mid-term performance, with most experiencing a decline in revenue and net property income growth, while the hotel and tourism sectors in mainland China have shown strong performance [1][5]. Group 1: REITs Performance - Most listed REITs reported a decline in revenue and net property income, with specific examples including: - Yuexiu REIT reported total revenue of 966 million RMB, down 6.6% year-on-year, and net property income of 679 million RMB, down 8.6% [3]. - Link REIT achieved revenue of 855 million HKD, down 2% year-on-year, with net property income of approximately 613 million HKD, down 3.2% [3]. - Sunshine REIT reported revenue of 391 million HKD, down 4.8%, and net property income of approximately 307 million HKD, down 5.4% [3]. - SF REIT achieved revenue of approximately 230 million HKD, up 3.4%, and net property income of approximately 192 million HKD, up 6% [3]. Group 2: Sector Analysis - The performance of different property sectors shows challenges: - Office, retail, and logistics sectors continue to face pressure, with declining occupancy rates reported [5][7]. - Yuexiu REIT's overall occupancy rate was approximately 82.2%, down 1.8 percentage points year-on-year [6]. - Sunshine REIT's overall occupancy rate was 89.2%, down about 2 percentage points from the beginning of the period [6]. - Conversely, the hotel and tourism sectors have performed well, with notable revenue increases: - Guangzhou IFC's serviced apartments achieved record revenue of 603 million RMB, and the Four Seasons Hotel in Guangzhou reported record room revenue of 190 million RMB, with an average occupancy rate of 80.1%, up 1.1 percentage points year-on-year [7]. Group 3: Market Outlook - The inclusion of REITs in the Shanghai-Hong Kong Stock Connect is seen as a significant breakthrough for capital market connectivity, potentially enhancing market activity and liquidity [1]. - The financing costs for several REITs have decreased, which may alleviate pressure on distributable income: - Yuexiu REIT reported a financing cost of 403 million RMB, down 13.5% year-on-year [8]. - Sunshine REIT's weighted average financing cost decreased from 4.2% to 3.7% year-on-year [8]. - Link REIT's financing cost decreased by 12.6% to 173 million HKD [8].

Group 1 - JPMorgan increased its stake in Link REIT (00823) by 604,528 shares at a price of HKD 44.4614 per share, totaling approximately HKD 26.8782 million [1] - After the increase, JPMorgan's total shareholding in Link REIT is approximately 131 million shares, representing a stake of 5.01% [1]

Core Viewpoint - Hong Kong-listed REITs are expected to enter the mainland market through the Stock Connect program, which is seen as a significant breakthrough for capital market connectivity and has strategic value for both Hong Kong and mainland investors [1][2]. Group 1: Performance of Listed REITs - Most listed REITs in Hong Kong reported a decline in revenue and net property income in their interim results [3][4]. - Yuexiu REIT reported total revenue of 966 million RMB, down 6.6% year-on-year, and net property income of 679 million RMB, down 8.6% [3]. - Prosperity REIT achieved revenue of 855 million HKD, down 2% year-on-year, with net property income of approximately 613 million HKD, down 3.2% [3]. - Sunshine REIT reported revenue of 391 million HKD, down 4.8% year-on-year, and net property income of approximately 307 million HKD, down 5.4% [3]. - SF REIT achieved revenue of approximately 230 million HKD, up 3.4% year-on-year, with net property income of approximately 192 million HKD, up 6% [3]. Group 2: Sector Performance - The performance of office, retail, and logistics properties remains challenging, while the hotel and tourism sectors have shown strong performance [5][7]. - The overall occupancy rate for Yuexiu REIT's properties was approximately 82.2%, a slight decline of 1.8 percentage points year-on-year [6]. - Sunshine REIT's overall occupancy rate was 89.2%, down 2 percentage points from the beginning of the period, with office occupancy at 90.0% and retail occupancy at 87.6% [6]. - The hotel and tourism sectors have seen significant growth, with properties like Guangzhou IFC serviced apartments achieving record revenue [7]. Group 3: Financing Costs - Financing costs have decreased, alleviating pressure on distributable income for several REITs [8]. - Yuexiu REIT reported financing costs of 403 million RMB, down 13.5% year-on-year, saving approximately 63 million RMB compared to the previous year [8]. - Sunshine REIT's weighted average financing cost decreased from 4.2% to 3.7% year-on-year [8]. - Prosperity REIT's financing costs decreased by 12.6% to 173 million HKD during the reporting period [8].

Core Viewpoint - The consumer sector is gaining attention as the market experiences a bullish trend, with a focus on the potential for recovery in domestic demand and the impact of government policies aimed at boosting consumption [1] Group 1: Company Performance - Sands China REIT reported a total revenue of RMB 336 million for the first half of 2025, reflecting a year-on-year growth of 2.2% [2][3] - The fixed income component of the REIT's revenue was RMB 237 million, showing a growth of 3% year-on-year, which provides a stable income base [2][4] - The variable income component increased slightly by 0.3% to RMB 9.88 million, indicating resilience in sales despite external pressures [4] Group 2: Business Model and Strategy - The REIT's EMA model combines fixed income with sales commissions, ensuring over 70% of revenue is stable and contractually guaranteed to grow by 3% annually [11][12] - Sands China REIT has successfully integrated traditional shopping with experiential consumption, enhancing customer engagement and sales [5][6] - The company has expanded its experiential offerings, such as children's play areas and dining options, which have increased foot traffic and sales [6] Group 3: Market Position and Growth Potential - The REIT has a substantial VIP membership base of 4.458 million, contributing 60% of store sales in Q2 2025, showcasing effective customer relationship management [7] - The REIT's flagship asset, the Chongqing Liangjiang project, has not been fully recognized in terms of its high efficiency and sales potential, indicating room for value appreciation [12][16] - The government’s focus on boosting consumption is expected to benefit the REIT, providing opportunities for value re-evaluation in the context of a recovering market [14][16] Group 4: Investment Appeal - The REIT's dynamic dividend yield stands at 8.7%, making it an attractive investment option in a low-interest-rate environment [16] - Despite the overall market performance, Sands China REIT's stock has underperformed, suggesting potential for future value recognition as market conditions improve [11][12] - The combination of stable cash flow, quality assets, and a unique business model positions Sands China REIT favorably for future growth [17]

Core Insights - Yuexiu Real Estate Investment Trust (Yuexiu REIT) reported a 6.6% year-on-year decline in operating income for the first half of 2025, totaling RMB 966 million, with a net property income of RMB 679 million and an overall occupancy rate of 82.2% [1] - The mid-term distribution per fund unit is approximately RMB 0.0333, equivalent to HKD 0.0366, with an annualized distribution yield of 8.42% [1] - The chairman highlighted strategic measures to capture market share, advance lease renewals, and invest in capital improvements to enhance product competitiveness amid a challenging global trade environment and economic slowdown [1] Financial Performance - Financing costs decreased to RMB 403 million, down 13.5% year-on-year, with an average financing cost at a three-year low of 3.92%, a reduction of 64 basis points [1] - The management of foreign exchange exposure improved, reducing by 31 percentage points to 28% compared to the same period last year [1] Debt and Financing - Yuexiu REIT successfully issued RMB 600 million three-year Panda bonds in July 2023, with a low coupon rate of 2.70%, marking the first listed REITs Panda bond globally [2] - The innovative financing channels and proactive financial management continue to optimize the debt structure, laying a solid foundation for future investment opportunities and sustainable development [2] Operational Performance - The office segment remains the primary revenue contributor, accounting for 55% of total income, with stable occupancy rates and favorable lease renewal conditions [2] - Guangzhou International Financial Center (Guangzhou IFC) achieved a lease renewal rate of 70%, with a strong customer visit and conversion rate, and a near 90% take-up rate for fully furnished units [2] - Hotel apartments contributed 26% to revenue, benefiting from the recovery of the domestic tourism market and consumer upgrade trends, with performance exceeding that of competing hotel apartments [2] Market Strategy - Yuexiu REIT plans to implement a proactive, steady, and flexible leasing strategy in response to economic trends, aiming to enhance the market competitiveness of its asset portfolio [3] - The company will continue to assess and adjust its financing structure to seek lower-cost RMB financing and mitigate interest rate risks [3] - Capital improvement projects will be carried out as planned, focusing on product enhancement, equipment upgrades, and safety assurance to ensure property value preservation and stable operations [3]

Core Insights - Yuexiu Real Estate Investment Trust reported stable operating performance with total revenue of RMB 966 million and net property income of RMB 679 million for the first half of the year [2] - The average financing cost has decreased to a near three-year low, reflecting prudent financial management [5] Operational Performance - The diversified property portfolio of Yuexiu REIT demonstrated robust operational stability, with office properties contributing 55% of total revenue, generating RMB 532 million [3] - The Guangzhou International Financial Center (IFC) office had a renewal rate of 70%, while the newly launched renovated units in Yuexiu Financial Tower achieved over 60% take-up rate [3] - The hotel and serviced apartment segment accounted for 26% of revenue, benefiting from the recovery of business travel and exhibitions, with the Four Seasons Hotel in Guangzhou achieving record room revenue of RMB 190 million [3] - Retail segment performance improved through brand adjustments and operational strategies, with the IFC's rental rate reaching 96.4% and the introduction of the first downtown duty-free store in Guangzhou [3] Financial Management - Total financing costs for the fund were RMB 403 million, a year-on-year decrease of 13.5%, saving approximately RMB 63 million [5] - The average interest rate for the first half was 3.92%, down 64 basis points, marking the lowest level in three years [5] - The fund successfully issued RMB 600 million three-year panda bonds in July, with a coupon rate of 2.70%, expanding its financing channels [5] - The fund's debt structure optimization led to an increase in RMB financing proportion to 72%, up 31 percentage points from the previous year, while foreign exchange exposure decreased from 59% to 28% [5]

1. Report Industry Investment Rating No relevant content provided. 2. Core View of the Report From August 11 to August 15, 2025, the secondary - market prices of China's listed public REITs showed a downward trend, with a general performance compared to other mainstream asset classes. The trading enthusiasm in the market decreased, and there were no new REITs listed in the primary market this week, but the status of some projects was updated [1][4]. 3. Summary According to the Directory 3.1 Secondary Market 3.1.1 Price Trend - **At the large - asset level**: The secondary - market prices of China's listed public REITs declined. The returns of China's public REITs were - 1.44%, ranking behind A - shares, convertible bonds, US stocks, crude oil, and pure bonds, but ahead of gold. The return ranking from high to low was: A - shares > convertible bonds > US stocks > crude oil > pure bonds > REITs > gold [11]. - **At the underlying - asset level**: Both equity - type and franchise - type REITs' secondary - market prices adjusted downward, with equity - type REITs having a larger decline. Among different underlying - asset types, consumer - type REITs had the smallest decline this week, and the top three in terms of returns were consumer - type, ecological - environmental - protection - type, and energy - type [16][18]. - **At the single - REIT level**: This week, public REITs showed mixed performance, with 7 rising and 66 falling. The top three in terms of increase were Southern Wanguo Data Center REIT, Southern Runze Technology Data Center REIT, and Huaxia China Resources Commercial REIT; the top three in terms of decline were ICBC Mengneng Clean Energy REIT, China Merchants Expressway REIT, and CICC Xiamen Anju REIT [23]. 3.1.2 Transaction Scale and Turnover Rate - **At the underlying - asset level**: The trading volume of public REITs this week was 3.27 billion yuan. New - infrastructure - type REITs led in the average daily turnover rate during the period. The top three in terms of trading volume were new - infrastructure - type, transportation - infrastructure - type, and park - infrastructure - type REITs; the top three in terms of the average daily turnover rate during the period were new - infrastructure, municipal - facilities - type, and energy - infrastructure REITs [24]. - **At the single - REIT level**: The trading volume and turnover rate of single REITs continued to show differentiation. The top three in terms of trading volume were Southern Wanguo Data Center REIT, Southern Runze Technology Data Center REIT, and Boshi Shekou Industrial Park REIT; the top three in terms of trading amount were Southern Runze Technology Data Center REIT, Southern Wanguo Data Center REIT, and Chuangjin Hexin Shounong REIT; the top three in terms of turnover rate were Southern Wanguo Data Center REIT, Southern Runze Technology Data Center REIT, and ICBC Mengneng Clean Energy REIT [27]. 3.1.3 Main - Force Net Inflow and Block - Trade Situation - **Main - force net inflow situation**: The total net inflow of the main force this week was 50.69 million yuan, and the trading enthusiasm in the market decreased. From the perspective of different underlying - asset REITs, the top three in terms of net inflow during the week were new - infrastructure - type, energy - infrastructure - type, and municipal - type; from the perspective of single REITs, the top three in terms of net inflow during the week were Southern Runze Technology Data Center REIT, Southern Wanguo Data Center REIT, and CITIC Construction Investment State Power Investment New Energy REIT [30]. - **Block - trade situation**: There were block - trade transactions on 5 trading days this week, with a total block - trade turnover of 327.75 million yuan, a decrease compared to last week. The block - trade turnover on Tuesday (August 12, 2025) was the highest in the week, reaching 101.05 million yuan. The top three in terms of block - trade turnover of single REITs were Huaxia Capital Outlet Mall REIT, E Fund Shenzhen Expressway REIT, and Southern Runze Technology Data Center REIT [31]. 3.2 Primary Market 3.2.1 Listed Projects As of August 15, 2025, the number of China's public REITs products reached 73, with a total issuance scale of 190.852 billion yuan. Among them, transportation - infrastructure - type REITs had the largest issuance scale, reaching 68.771 billion yuan, followed by park - infrastructure - type REITs with an issuance scale of 31.835 billion yuan. No new REITs were listed this week [35][36]. 3.2.2 Projects to be Listed According to the project - status disclosures of the Shanghai and Shenzhen Stock Exchanges, there were 17 REITs in the to - be - listed state, including 11 initial - offering REITs and 6 to - be - expanded - offering REITs. This week, the status of the initial - offering project of "Huaxia Kaide Commercial Asset Closed - end Infrastructure Securities Investment Fund", the initial - offering project of "Citic Construction Investment Shenyang International Software Park Closed - end Infrastructure Securities Investment Fund", and the expanded - offering project of "Guotai Junan Dongjiu New Economy Industrial Park Closed - end Infrastructure Securities Investment Fund" was updated to "Feedback Provided" [41].

Core Viewpoint - Yuexiu Real Estate Investment Trust (00405.HK) reported strong half-year results for 2025, with total operating income of 966 million RMB and a net property income of 679 million RMB, achieving an overall occupancy rate of 82.2% [2][4]. Group 1: Financial Performance - The total operating income for the first half of 2025 was 966 million RMB, with a net property income of 679 million RMB [2]. - The operating income from office properties contributed 55% of total revenue, amounting to 532 million RMB, with a new signed area of 48,822 m², reflecting a year-on-year growth of 7.5% [2]. - The financing cost decreased by 13.5% year-on-year, saving 63 million RMB, with the average financing cost reaching a near three-year low [4]. Group 2: Segment Performance - Hotel and apartment revenue accounted for 26% of total income, with Guangzhou IFC Ascott serviced apartments achieving record revenue of 60.3 million RMB due to increased occupancy rates [3]. - The Guangzhou Four Seasons Hotel capitalized on foreign high-net-worth clientele, generating 190 million RMB in room revenue, with an average occupancy rate of 80.1%, up by 1.1 percentage points year-on-year [3]. - The Guangzhou White Horse Clothing Market reported an operating income of 109 million RMB, maintaining a 95% occupancy rate, and facilitated procurement worth 140 million RMB [3]. Group 3: Strategic Initiatives - The fund's management has actively optimized its financial structure, increasing the proportion of RMB financing to 72%, up by 31 percentage points year-on-year [4]. - In July 2023, the fund successfully issued 600 million RMB in three-year Panda bonds at a low interest rate of 2.70%, marking a significant milestone as the first listed REITs Panda bond issuance globally [4]. - Looking ahead to the second half of 2025, the fund aims to enhance asset value and maintain high-quality development amidst external uncertainties [4].