UBS: Raises KERRY PPT (00683) target price to 24 Hong Kong dollars, maintains "buy" rating.

UBS released a research report stating that it has lowered KERRY PPT's profit forecast for the next two years by 25% to 27% to reflect the latest completion schedule of development projects, lower profit margin forecasts, and lower interest capitalization. However, the group's target price has been raised from HK$21.4 to HK$24, maintaining a "buy" rating. The bank believes that the development of China's private real estate investment trust market can provide new channels for capital recovery for Hong Kong developers like KERRY PPT. Investors are focusing on the potential catalysts for KERRY PPT after the potential sale of the second phase of "Jinling Residences" in the second half of the year. The bank believes that private real estate investment trusts are catalysts for asset recovery, as over 40% of Kerry's assets are related to Mainland Chinese investment properties. The bank estimates that 68% of its mainland investment properties meet the requirements of private real estate investment trusts. Based on Kerry's current price-to-earnings ratio of 0.29 times and a conservative mainland investment property valuation rate of 4.8% to 7%, asset divestment is expected to increase its stock price. The bank expects Kerry to report profits of less than HK$1 billion in the first half of the year, with a projected comprehensive property development profit margin of 15%, similar to last year. As for investment properties, the bank expects the group's rental income in Hong Kong and mainland China to experience a mid-single-digit decline.