Lyon: Raised target price of LINK REIT (00823) to HKD 51, maintaining "outperform" rating.

Lyon released a research report stating that LINK REIT's performance for the first half of the 2026 fiscal year is below expectations. The company has taken measures to address this, and the bank believes that the incremental negative impact will gradually fade starting from the 2027 fiscal year. The bank has lowered its profit forecasts for Link REIT for the 2026, 2027, and 2028 fiscal years by 4.5%, 1.6%, and 0.3% respectively, due to the poor performance of Hong Kong and Mainland shopping malls compared to expectations. Due to the decrease in US Treasury bond yields, the target price has been raised from 50.5 Hong Kong dollars to 51 Hong Kong dollars, and the outperform the market rating is maintained. Lyon points out that as Link REIT has the highest yield among the Hong Kong property stocks it covers, it believes that the negative factors are already reflected in the stock price, making the current portfolio attractive, including defensive high yields and the potential for inclusion in the Stock Connect program.