Investment Rating - The industry rating has been upgraded from "Neutral" to "Outperform" [1][13] Core Insights - The recovery of the Hong Kong real estate market is expected to be a gradual process, with different asset sub-sectors recovering at different rates. The residential sector is anticipated to lead the recovery, followed by quality retail assets and core office spaces [1][8] - Key catalysts for the market recovery include improvements in macroeconomic uncertainty, significant policy easing, and a return of fundamental demand drivers such as demographic trends [5][21] - The report highlights that the residential sector is poised for a rebound, with rental levels expected to rise by approximately 3-5% in 2025, and property prices projected to increase by 3-5% in 2025, 5% in 2026, and 5% in 2027 [5][12] Summary by Sections Investment Highlights - The report emphasizes the importance of selecting the right sub-sector in the Hong Kong real estate market, indicating that the recovery will not be a single event but a phased process targeting different segments [8][20] - The report identifies Sun Hung Kai Properties (16 HK) and Link REIT (823 HK) as preferred investment targets, expecting both to benefit from the sector's recovery and multiple catalysts in the next 1-2 years [1][13] Market Trends and Drivers - The report notes that the Hong Kong real estate market is experiencing a turning point, with several important catalysts indicating that the market is at or near a reversal point [5][20] - The residential sector is expected to see a significant rebound driven by sustained population inflow, which will continue to support housing demand, particularly in the rental market [5][21] - Retail properties are also on a recovery path, supported by stabilizing local consumer sentiment and an increase in inbound tourists, although the growth rate is expected to be more moderate compared to residential properties [5][12] Valuation Overview - The report discusses the potential for asset net value (NAV) expansion and valuation multiple expansion as key drivers for stock price appreciation in the real estate sector [12][11] - The anticipated recovery in rental income and asset prices will directly impact companies' NAV estimates, providing a solid foundation for stock price increases [12][11] Company-Specific Insights - Sun Hung Kai Properties (16 HK) is highlighted as a key beneficiary of the residential recovery, with expectations of improved sales performance and profit margins due to high absorption rates and rising average selling prices [14][15] - Link REIT (823 HK) is positioned as a defensive, high-yield investment choice, expected to benefit from potential interest rate cuts and inclusion in the Hong Kong Stock Connect, which could attract new capital inflows [16][17]

Core Viewpoint - Spring Springs Industrial Trust (01426) announced a buyback of 30,000 fund units at a total cost of HKD 48.8 million, with a repurchase price ranging from HKD 1.62 to HKD 1.63 per unit [1] Group 1 - The fund will execute the buyback on November 26, 2025 [1] - The total expenditure for the buyback is HKD 48.8 million [1] - The repurchase price per unit is set between HKD 1.62 and HKD 1.63 [1]

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]

Core Viewpoint - The report from CMB International indicates that Link REIT's interim results for the fiscal year 2026 show a decline in revenue and net property income, primarily due to retail market fluctuations and negative rental adjustments in Hong Kong and mainland China [1] Financial Performance - Revenue decreased by 1.8% year-on-year to HKD 7.023 billion [1] - Net property income fell by 3.4% year-on-year to HKD 5.178 billion [1] - Total distributable amount was HKD 3.283 billion, with a distribution per unit of HKD 1.2688, representing a year-on-year decline of 5.9% [1] Market Challenges - Link REIT continues to face challenges such as rising labor costs and uncertainty in the retail market recovery [1] - The rental adjustment rates for renewals in Hong Kong and mainland China were negative, impacting overall performance [1] Analyst Adjustments - The target price for Link REIT has been revised down from HKD 49.8 to HKD 45.7, while maintaining a "Buy" rating [1] - The expected distribution per unit (DPU) has been lowered due to ongoing challenges [1] Investment Outlook - Despite short-term price corrections, the dividend yield is approximately 7%, presenting a long-term accumulation opportunity [1] - Anticipation of further interest rate cuts and potential inclusion in the Hong Kong Stock Connect may lead to a mid-to-long-term valuation reassessment [1]

Group 1: Nvidia (NVDA US) - The company's performance and guidance exceeded expectations, with FY3Q26 revenue of $57 billion and EPS of $1.30, both surpassing market expectations [1] - Management's guidance for FY4Q26 revenue is $65 billion (+/-2%), significantly above market expectations, with a gross margin forecast of 75% [2] - The short-term guidance is positive, but investors remain focused on the sustainability of demand in CY26 and beyond, particularly in the AI sector [2] Group 2: CSPC Pharmaceutical Group (1093 HK) - The company's 3Q25 performance showed a slight recovery, with revenue of 6.62 billion HKD, although it was slightly below expectations [3] - The oncology segment continues to be affected by centralized procurement, but the decline has narrowed [3] - Management expects a return to positive growth in 2026, with significant R&D investments planned [3][4] Group 3: Link REIT (823 HK) - The company reported a 1.8% year-on-year decline in revenue for the first half of FY25/26, primarily due to retail market fluctuations [7] - The rental adjustment rate for renewals in Hong Kong and mainland China was negative, impacting property income [8] - Despite challenges, the company maintains a buy rating, believing that recent stock price corrections present buying opportunities [8]

Group 1 - The target price for Link REIT (00823) has been lowered by 8.2% from HKD 49.8 to HKD 45.7, while maintaining a "Buy" rating [1] - The short-term stock price correction has resulted in a dividend yield of approximately 7%, presenting a long-term accumulation opportunity [1] - Management anticipates continued challenges in rental adjustments for renewals in mainland China and Hong Kong, which may pressure distributions for FY2026 [1] Group 2 - Link REIT's mid-term performance (as of September 30) was slightly below expectations, with revenue decreasing by 1.8% year-on-year to HKD 7.023 billion [1] - Net property income fell by 3.4% year-on-year to HKD 5.178 billion, primarily due to retail market fluctuations and negative rental adjustment rates [1] - The net debt ratio as of September 2025 is 22.5%, a slight increase from 21.5% as of March 31, 2025, but still at a low level [2]

Group 1 - The target price for Link REIT (00823) has been lowered by 8.2% from HKD 49.8 to HKD 45.7, while maintaining a "Buy" rating [1] - The short-term stock price correction has resulted in a dividend yield of approximately 7%, presenting a long-term accumulation opportunity [1] - Management anticipates continued challenges in rental adjustments for renewals in mainland China and Hong Kong, which may pressure distributions for the fiscal year 2026 [1] Group 2 - The mid-term performance of Link REIT (as of September 30) was slightly below expectations, with revenue decreasing by 1.8% year-on-year to HKD 7.023 billion [1] - Net property income fell by 3.4% year-on-year to HKD 5.178 billion, primarily due to retail market fluctuations and negative rental adjustment rates [1] - The net debt ratio as of September 2025 is 22.5%, a slight increase from 21.5% as of March 31, 2025, but still at a low level [2]

Investment Rating - The report does not explicitly provide an investment rating for the REITs industry Core Insights - The report highlights that Link REIT's rental income is under pressure, with a negative rental adjustment rate expected in the short term for properties in Hong Kong and mainland China, leading to a slight deterioration in the operating environment before a potential rebound [1][11][13] - The C-REITs secondary market is experiencing a general pullback, with a total market capitalization of approximately 219.85 billion yuan and an average market cap of about 2.9 billion yuan per REIT [3][16] - The report suggests three main investment strategies for REITs: focusing on quality undervalued projects, considering the resilience of weak-cycle assets, and paying attention to original rights holders with ample asset reserves [5] Summary by Sections REITs Events - On November 20, Link REIT reported a total revenue of 7.02 billion HKD and a net property income of 5.18 billion HKD, reflecting a year-on-year decrease of 1.8% and 3.4% respectively [1][11] - The rental adjustment rate for retail properties in Hong Kong was reported at -6.4%, indicating ongoing challenges in the market [12] REITs Index Performance - The CSI REITs total return index fell by 0.89% this week, with the closing index at 810.2 points [14] - Year-to-date, the CSI REITs total return index has increased by 7.57% [2][14] REITs Secondary Market Performance - The secondary market for C-REITs showed a decline, with 9 REITs rising and 68 falling, resulting in an average weekly decline of 1.2% [3][16] - The logistics and industrial park REITs experienced a smaller decline compared to data center and affordable housing REITs, which saw larger pullbacks [16] REITs Valuation Performance - The internal rate of return (IRR) for listed REITs shows significant differentiation, with top performers including Huaxia China Communications REIT at 9.7% and Ping An Guangzhou Guanghe REIT at 9.2% [5] - The price-to-net asset value (P/NAV) ratio for various REITs ranges from 0.7 to 1.8, indicating varying levels of valuation [5] Investment Recommendations - The report recommends focusing on high-quality, undervalued projects, particularly in high-energy cities, and considering the resilience of weak-cycle assets [5] - It also emphasizes the importance of monitoring original rights holders with strong asset reserves for future growth opportunities [5]

Core Insights - The REITs market is experiencing high premium rates, with an average premium rate of approximately 40.66% as of November 21, 2025, indicating a potential disconnect between asset value and market price [2][4] - The market is facing challenges due to declining trading volumes and liquidity issues, which may lead to significant volatility and instability in the REITs sector by 2026 [1][4] - The performance of REITs in the secondary market is under scrutiny as investors assess the impact of earnings completion on market prices, particularly for those with high premium rates [1][4] Market Dynamics - The "嘉实物美消费REIT" has the highest premium rate at 77.26%, suggesting a significant deviation between market capitalization growth and asset value [4] - Many REITs lack comprehensive annual comparable data, and some have shown negative growth, raising concerns about the sustainability of high premium rates [4][5] - The current REITs market resembles previous high points, but with more diversified institutional investors and increased large transactions [5] Premium Rate Analysis - Different sectors show varying premium rate potentials: industrial parks have an average premium space of 18.23%, logistics warehouses 33.19%, affordable housing 26.03%, and consumer sectors 21.76% [5] - The premium rates are compared against historical averages and issuance predictions, indicating potential for further adjustments in the market [5] Investor Behavior - As the year-end approaches, investor profit-taking is expected to increase, leading to a potential passive rush to exit positions [6] - The market may experience a high-level stagnation due to a combination of improved distribution rates, good earnings completion, and institutional self-rescue efforts [6]