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Cheryl Arcibal

Analysts said they had mixed views about Sun Hung Kai Properties’ (SHKP) shares after Hong Kong’s largest property developer by market capitalisation reported a slight increase in its full-year earnings.
On Friday, Morningstar cut its price target for SHKP to HK$105 from HK$115, but said the company was trading at a good discount. UOB Kay Hian and Morgan Stanley said the earnings were largely in line with expectations. The US investment bank had an overweight recommendation and expected earnings per share of HK$7.56 this year, up from a year earlier.
Citi recommended a buy with a target price of HK$105.
SHKP’s shares closed 0.8 per cent higher at HK$92.15 on Friday after the company said a day earlier that its net profit for the financial year that ended in June rose 1.2 per cent to HK$19.27 billion (US$2.47 billion) from HK$19.04 billion a year earlier. The company’s underlying profit rose 0.5 per cent to HK$21.85 billion.
The company’s net profit missed a consensus estimate from nine analysts by 10 per cent, according to Bloomberg. Underlying profit missed the mark by 2.5 per cent and sales undershot estimates by 2.9 per cent.
“We anticipate continued pressure on housing prices and developer margins due to elevated inventory levels which should improve gradually as investor sentiment strengthens, driven by better rental yields and absorption of excess inventory,” said Xavier Lee, an equity analyst at Morningstar.
SHKP’s contracted sales came in at a five-year high of HK$42.3 billion, Lee added.
“Despite the strong contracted sales performance, we reduced our revenue and margin assumptions for the Hong Kong property development segment, pushing back our recovery outlook to 2027,” Morningstar said. “This adjustment results in a 12 per cent to 14 per cent reduction in our fiscal 2026-28 [earnings per share] forecasts.”
The developer, which had a portfolio of completed projects with a gross floor area of 37.7 million square feet, said it expected Hong Kong’s housing market to stabilise further, citing eased homebuying restrictions, active financial markets and improving tourism.
“Dedicated efforts in developing the city as an international hub for high-calibre talent will boost socio-economic development, while initiatives to attract both mainland and international enterprises to Hong Kong have lifted the total number of registered companies to a record high, driving economic activities in the city and reinforcing the city’s role as a springboard for mainland enterprises to go global,” said Raymond Kwok Ping-luen, SHKP’s chairman and managing director, on Thursday.
As a result, he said, buyer “confidence and transaction volumes in the residential sector are expected to show continued improvement”.
The firm’s rental revenue from property investment in Hong Kong, including joint ventures, decreased 2 per cent to HK$17.53 billion for the year. Revenue from its retail portfolio decreased by 2 per cent to HK$9.08 billion.
Praveen Choudhary, the head of Hong Kong real estate research at Morgan Stanley, said SHKP’s retail sales outperformed the broader market. Occupancies at the International Commerce Centre and International Finance Centre were at 92 per cent, he said, beating the broader market.
UOB, which had an SHKP target price of HK$103, noted the developer’s “fairly positive” view on Hong Kong’s residential market.
SHKP’s major projects to be completed in Hong Kong from this financial year up to 2027-2028 would span 1.65 million sq ft to 4.37 million sq ft a year. Additionally, 10.3 million sq ft would be completed by the 2028-2029 financial year and beyond.
“While the local property market remained subdued in the first half of the year, transaction levels showed signs of recovery – particularly in the low-to-mid-tier housing segment ,” said Kenny Ng Lai-yin, a strategist at Everbright Securities International. “This rebound is expected to support a gradual market revival, suggesting the sector’s nadir may be gradually passing .”


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Sun Hung Kai Properties says net profit for the recently concluded financial year rises 1.2 per cent from a year earlier


Sun Hung Kai Properties says net profit for the recently concluded financial year rises 1.2 per cent from a year earlier.


Analysts mixed on outlook for Sun Hung Kai Properties’ shares after slight profit rise

.css-1c6uqr6{color:inherit;font-weight:inherit;font-size:inherit;font-family:inherit;line-height:inherit;overflow-wrap:break-word;}Sun Hung Kai Properties says net profit for the recently concluded financial year rises 1.2 per cent from a year earlier

Sun Hung Kai Properties says net profit for the recently concluded financial year rises 1.2 per cent from a year earlier