Core Viewpoint - DBS has set a target price of HKD 30.38 for Swire Properties (01972) with a "Buy" rating, highlighting the potential for significant stock price appreciation driven by new retail complexes in Beijing, Shanghai, Sanya, and Xi'an starting this year [1] Group 1: Financial Performance and Projections - The new projects are expected to be important catalysts for Swire Properties' medium to long-term profit and dividend growth, which will drive stock price increases [1] - Following a recent rise in stock price, the current price is at a 50% discount to net asset value (NAV), indicating potential for long-term upward movement [1] Group 2: Operational Insights - Swire Properties has a track record of creating long-term value through the development and management of property complexes [1] - Core operations show signs of improvement, with the office portfolio at Pacific Place demonstrating stability, and retail tenant sales in Hong Kong and mainland China improving, which is expected to support stable rental income [1] Group 3: Recent Transactions - The company announced the sale of two independent houses at the luxury project "6 Deep Water Bay Road" for HKD 2.2 billion, equivalent to HKD 147,000 per square foot, with the transaction expected to complete in the first quarter of this year, likely contributing significant profits to support net profit performance [1]

Core Viewpoint - The company is expected to show a steady improvement in its core asset operations in the second half of 2025, with a projected 21% year-on-year growth in shareholder's attributable/recurring basic profit, despite a 5% decline overall [1] Group 1: Property Investment Performance - The investment property operations are expected to perform steadily, with notable improvement in mainland shopping malls. The basic profit from property investment is projected to slightly decline year-on-year, primarily due to the impact of Hong Kong office business, which is expected to see a rental decline of approximately 5% in the first half of 2025 [1] - Conversely, retail sales and rental income from mainland shopping malls are anticipated to improve in the second half of 2025, with a projected increase of 1% in both retail sales and rental income in the first half of 2025 [1] Group 2: Capital Recycling Plan and Financial Health - The capital recycling plan is progressing smoothly, with the company completing the disposal of non-core assets such as the Miami mall and parking spaces in the first half of 2025. The company is expected to continue successful disposals in the second half of 2025, contributing approximately 2 billion HKD in profits from property disposals for the year [2] - The company maintains a stable balance sheet with a net debt ratio of 15.7% in the first half of 2025, despite ongoing capital expenditures [2] Group 3: Earnings Forecast and Valuation - The company is expected to maintain a steady performance, supporting its long-term dividend policy. The recurring basic profit forecast for 2025 is maintained at 6.17 billion HKD, reflecting a 5% year-on-year decline, while the basic profit is adjusted upward by 12% to 8.17 billion HKD due to better-than-expected asset disposal progress [2] - The 2026 recurring basic profit forecast is raised by 11% to 7.99 billion HKD, reflecting the impact of sales settlements, while a new forecast for 2027 is introduced at 7.12 billion HKD, indicating a cautious estimate for property development settlements [2] - The company aims to maintain a long-term policy of increasing dividends at a mid-single-digit rate annually, with a projected dividend yield of 5.0% for 2025 [2]