Bank of America Securities: Lower the target price of LINK REIT (00823) to HK$43 and maintain a "buy" rating.

Bank of America Securities released a research report stating that LINK REIT (00823) underperformed expectations in the mid-term performance for the fiscal year ending in September 2026. They have lowered their forecast for the distribution per unit (DPU) for the fiscal years 2026 to 2028 by 2% to 3%, and adjusted the target price from HK$45 to HK$43. The bank believes that the current valuation of the company is still attractive and reiterated a "buy" rating. The bank stated that the biggest negative factor for LINK REIT is the sharp decline in mainland retail rental income, while a 6% decrease in Hong Kong renewal rents is within expectations. However, the widening year-on-year decline in tenant sales in the company's second quarter has disappointed the market. The bank expects that cost-cutting measures at LINK REIT will help stabilize its DPU until the mid-term of the fiscal year 2027, and the company should be able to adjust its business portfolio to better cope with competition from e-commerce.