HK Stock Market Move | WHARF REIC (01997) fell more than 3%, with a 2% increase in underlying net profit last year. Bank of America Merrill Lynch said its dividend per share slightly missed expectations.

WHARF REIC (01997) fell more than 3%, as of the press release, it dropped 3.57% to 19.72 Hong Kong dollars with a turnover of 86.02 million Hong Kong dollars. On the news front, WHARF REIC recently released its 2024 full-year performance announcement, with group revenue decreasing by 3% year-on-year to 12.912 billion Hong Kong dollars, and operating profit decreasing by 3% year-on-year to 9.691 billion Hong Kong dollars. Basic net profit increased by 2% to 6.139 billion Hong Kong dollars, equivalent to 2.02 Hong Kong dollars per share. If the net reduction in fair value of investment properties of HK$5.621 billion is included, the group's profit attributable to shareholders is HK$891 million, compared to HK$4.766 billion in the same period of last year, a decrease of approximately 81%. The second interim dividend is HK$0.6, while the interim dividend of the same period last year was HK$0.61. The annual dividend is HK$1.24, accounting for 65% of the basic net profit of Hong Kong investment properties and hotels. Bank of America Securities released a research report stating that after WHARF REIC's slightly lower-than-expected dividend per share for the 2024 fiscal year, it reiterates its "buy" rating on the stock. However, the net asset value per share has decreased due to the drop in rent, and its target price has been lowered from 23.5 Hong Kong dollars to 23 Hong Kong dollars. The bank stated that although retail rents at Kowloon have shown significant weakness in the second half of 2024 due to sales pressure, tenant occupancy costs remain at a manageable level. The bank believes that the worst period of decline in retail sales has passed, as the base comparison has become easier from March onwards and the outflow of local retail sales seems to have stabilized. The bank has lowered its dividend per share forecast for the 2025 to 2027 fiscal years for Kowloon by 7% to 10%, predicting a 4% year-on-year decrease in the dividend per share for the 2025 fiscal year. If 1-month HIBOR remains low, the stock may have upside potential.