Hongkong Land - DBS Research 2016-07-21: 1H16 Result Preview

Hongkong Land - DBS Research 2016-07-21: 1H16 Result Preview HONGKONG LAND HOLDINGS LIMITED H78.SI 

Hongkong Land (HKL SP) - 1H16 result preview

  • Hongkong Land’s underlying interim earnings expected to fall 6%.
  • Gross rental receipts should grow modestly by 3%.



Forecast

  • Hongkong Land will report its interim results for FY16 on 28 July. 
  • We forecast the company’s underlying earnings to fall 6% to US$393m partly because it recorded a provision write-back of US$16m for MCL’s Singapore projects in 1H15. 
  • Interim DPS is expected to remain unchanged at US$0.06. 
  • Gross rental revenue is estimated to be 3% higher due to positive rental reversion and slightly higher average occupancy for its Central office portfolio. 
  • Average rent growth for retail portfolio is expected to moderate. 
  • MCL did not complete any project in 1H16. Residential earnings which are primarily from China, would be a swing factor on earnings.
  • Key things to watch for include the company’s outlook of office markets in Hong Kong/Singapore, latest office occupancy and rental reversion trend, contributions from residential projects in China and an update on new investment plans in the region.
  • Price Target: US$7.87. Rating: BUY.





Jeff YAU CFA DBS Vickers | Andrew Robert LAM DBS Vickers | http://www.dbsvickers.com/ 2016-07-21
CIMB Securities SGX Stock Analyst Report BUY Maintain BUY 7.87 Same 7.87


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