UBS: Sale of U.S. properties expected to have a slight positive impact on Swire Properties' (00019) stock price.

UBS released a research report stating that Tai Kwun A (00019) and SWIREPROPERTIES (01972) jointly announced the sale of the retail portion (75% stake), common facilities, and parking lot of the Brickell City Centre in the United States, with a total value of approximately $549 million, equivalent to about $4.28 billion Hong Kong dollars, to Simon Property. UBS rates Tai Kwun A as "sell" with a target price of $59.9. The bank expects that this sale may have a slight positive impact on Tai Kwun A's stock price, estimating that this sale may improve Tai Kwun A's estimated adjusted debt to EBITDA ratio from 4.63 times to 4.59 times by 2025, still higher than the S&P's requirement of 4.5 times. At the same time, the company is not expected to conduct share buybacks after the announcement, as the debt to EBITDA ratio is still above 4.5 times. SWIREPROPERTIES has indicated that cash proceeds will be prioritized for supporting its per-share dividend growth target each year, followed by new investment acquisitions or share buybacks, rather than debt repayment. After the transaction is completed, Tai Kwun A is expected to record a pre-tax profit of $725 million Hong Kong dollars, accounting for 6% of the bank's estimated baseline profit for 2025.