Citigroup: Maintain "Buy" rating on SHK PPT (00016) and raise target price to HK$88.8

Citi released a research report stating that it maintains a "buy" rating for SHK PPT (00016), with the target price raised slightly from 88.5 Hong Kong dollars to 88.8 Hong Kong dollars. The bank predicts an annual dividend per share of 3.8 Hong Kong dollars, with a dividend yield of 5.1%. Despite the flat mid-term dividend, the bank believes that New World is a representative of the Hong Kong residential market and benefits from a stable interest rate outlook. Citi pointed out that SHK PPT is cautiously optimistic about its prospects. It aims to balance cash flow payments of 40 to 50%, new investments, and reducing debt ratios, and achieve this goal by controlling capital expenditures. The company has consistently demonstrated its asset turnover capabilities, which is crucial as it plans to launch a large number of new projects (estimated at about 4,000 units within 10 months) and hold unsold inventory (estimated at about 3,500 units). The bank expects New World's profit in the fiscal year 2025 to be flat, benefiting from high-profit pre-sale projects and land recoveries, but impacted by a provision of 1 billion Hong Kong dollars for the Tianshi Tian project. The fiscal year 2026/27 is expected to benefit from strong investment property projects driving rental income, offsetting the impact of low-profit property completions.