Core Viewpoint - The report from CMB International slightly raises the target price for Link REIT (00823) to HKD 49.8, maintaining a "Buy" rating, citing potential interest rate cuts and inclusion in the Stock Connect as key catalysts in the next 12 months [1] Group 1: Target Price and Ratings - CMB International has adjusted the target price for Link REIT to HKD 49.8, reflecting a slight increase due to anticipated interest rate and discount rate reductions [1] - The firm maintains a "Buy" rating on Link REIT, indicating confidence in the stock's performance [1] Group 2: Financial Projections - The company has slightly reduced its per unit dividend forecasts for FY2026 and FY2027 by approximately 1.5% and 2.9% respectively, while introducing projections for FY2028 [1] - The anticipated decline in HIBOR/SORA/BBSY is expected to help lower financing costs for the company [1] Group 3: Operational Performance - Link REIT's latest operational data shows a 0.8% year-on-year decline in sales for its Hong Kong retail property portfolio in Q1 FY2026, which is slightly below the overall market growth of 0.4% [1] - The high occupancy rates remain strong, with retail properties at 97.6% and office buildings at 99.2% [1] - The company forecasts a negative single-digit adjustment rate for renewal rents, which may lead to a slight decline in revenue for FY2026 [1]

Report Industry Investment Rating No information about the report industry investment rating is provided in the content. Core Viewpoints of the Report - This week, the REITs market showed a pattern of first declining and then rising, with an overall decline. The liquidity improved significantly, but the main funds turned into a net outflow. The first high - speed REIT of the year was declared and accepted. The issuance scale of REITs this year increased year - on - year [5]. - The CSI REITs Total Return Index fell this week, underperforming the Shanghai and Shenzhen 300 and CSI Dividend Indexes. Different asset - type REITs had different performance, and the data center, transportation, energy, and warehousing logistics sectors performed better [5]. Summary According to the Directory 1. Primary Market: Two First - Issue Public REITs Made New Progress - As of August 15, 2025, 15 REITs have been successfully issued this year, with a total issuance scale of 31.35 billion yuan, a year - on - year increase of 2.9%. This week, two first - issue public REITs made new progress: the ChinaAMC Vipshop Outlet Mall REIT completed its fundraising, with an expected fundraising of 3.48 billion yuan; the Huaxia Jiaotou Chutian Expressway REIT was declared on August 18 and accepted on August 22 [5]. - The underlying assets of the Huaxia Jiaotou Chutian Expressway REIT are the toll rights and ancillary facilities of the main line of the Macheng - Xishui section of the Daqing - Guangzhou Expressway in Hubei Province, with a toll - collection mileage of 147.1 kilometers. The original equity holders are Chutian Expressway (listed on the A - share market) and Hubei Communications Investment Construction Group [5]. - In the current approval process, there are 10 first - issue REITs that have been declared, 2 that have been questioned and responded, 1 that has passed the review, and 1 that has been registered and is awaiting listing. For the expansion and issuance, 9 have been declared, 7 have been questioned and responded, and 6 have passed the review [5]. 2. Secondary Market: The Index Accelerated Its Decline and Then Had a Slight Recovery This Week 2.1 Market Review: The CSI REITs Total Return Index Fell by 1.74% - This week, the CSI REITs Total Return Index (932047.CSI) closed at 1062.06 points, a decline of 1.74%, underperforming the Shanghai and Shenzhen 300 by 5.92 percentage points and the CSI Dividend by 2.57 percentage points. The year - to - date increase of the CSI REITs Total Return Index is 9.73%, underperforming the Shanghai and Shenzhen 300/CSI Dividend by 1.53/9.41 percentage points [5]. - By project attribute, property - type REITs fell 2.03%, and concession - type REITs fell 1.13%. By asset type, the data center (- 0.96%), transportation (- 1.03%), energy (- 1.06%), and warehousing logistics (- 1.23%) sectors performed better. Among individual bonds, 9 rose and 64 fell this week [5]. 2.2 Liquidity: Both the Turnover Rate and Trading Volume Increased - The average daily turnover rates of property - type and concession - type REITs this week were 0.85% and 0.56% respectively, an increase of 17.88 and 3.64 basis points compared with last week. The trading volumes during the week were 706 million and 154 million shares respectively, a week - on - week increase of 29.48% and 6.99%. The data center sector had the highest activity [5]. 2.3 Valuation: The Valuation of the Affordable Housing Sector Is Relatively High - From the perspective of the ChinaBond valuation yield, the yields of property - type and concession - type REITs are 3.88% and 3.81% respectively. The warehousing logistics (5.32%), transportation (4.62%), and park (4.34%) sectors rank among the top three [5]. 3. This Week's News and Important Announcements - On August 15, 2025, Linyuan Investment subscribed to the public REITs market for the first time. A number of private funds under Linyuan Investment participated in the offline subscription of the ChinaAMC Vipshop Outlet Mall REIT, with a total subscription amount of nearly 80 million yuan [38]. - On August 15, 2025, the first private - owned private - placement consumer REIT, the Guojin Asset Management - Wuyue Square Hold - type Real Estate Asset - Backed Special Plan, was officially approved, with an issuance scale of 1.064 billion yuan [38]. - There are also announcements such as the lifting of strategic placement share restrictions, operating data announcements, and expansion progress announcements for multiple REITs [39][40].

Investment Highlights - The new VPH REIT (508082.SH) is based on the Ningbo Shanjing Outlet, with an asset value of CNY 2.901 billion[2] - The outlet has a commercial area of 83,300 square meters and a high occupancy rate of 99.91% expected by the end of 2024[2] Issuance and Valuation - The REIT will issue 1 billion units, with allocations of 70% for strategic placement, 21% for offline, and 9% for public[3] - The initial IRR is projected at 7.75%, with expected distributable amounts of CNY 151 million and CNY 164 million for the next two years[3] - The issuance price is set at CNY 3.48, with a P/NAV of 1.20 times and a corresponding P/FFO of 23.05 times[3] Market Comparison and Target Price - The average P/NAV for comparable REITs is 1.41 times, with a median P/FFO of 25.02 times and a TTM dividend yield of 3.69%[4] - The target price for VPH REIT is estimated between CNY 4.58 and CNY 5.46, representing a potential increase of 32% to 57% from the issuance price[4] Risk Factors - Risks include consumer downturns, increased competition, operational inefficiencies, and potential declines in market valuations[5]

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][10][15] 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, surpassing those in Hong Kong, Singapore, and Japan, 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][4] - These funds are required to distribute at least 90% of their annual income to unit holders, ensuring consistent cash flow [6] - H-REITs offer high liquidity as they are publicly traded, allowing investors to buy and sell like stocks [6] - They possess natural 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 management system developed over 20 years [8] - The REIT has maintained a high occupancy rate of 97.8% in its Hong Kong properties, despite challenges in the retail sector [12] - Link REIT has consistently distributed 100% of its distributable income as dividends, achieving an annualized return rate of nearly 11% and a total distributable amount growth rate of 7.1% [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 between mainland China and Hong Kong [10] - This policy is expected to attract long-term capital from index funds, ETFs, and pension funds, increasing market activity and liquidity [11] - The launch of new products, such as the Southbound Asia Pacific REITs ETF, indicates growing investor interest in REIT assets [11] Group 5: Future Outlook - The ongoing low-interest-rate environment presents dual opportunities for H-REITs, enhancing both their financing conditions and the capital appreciation potential of quality rental assets [9][10]

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]