Morgan Stanley: Expects SEAZEN (01030) rights issue to alleviate liquidity concerns and potentially drive future revaluation.

Morgan Stanley released a research report stating that SEAZEN (01030) announced a placement of 198 million shares (dilution rate of 2.73%) at HK$2.39 per share to raise approximately HK$4.7 billion. It is believed that this move will further reduce market concerns about the liquidity risk of redeeming offshore bonds of about US$400 million due in May, or push the stock price to further adjust from the current forecasted price-to-earnings ratio of 6 times and 5.6 times for 2026 and 2027 regular profits, respectively. The target price is HK$2.81, with a rating of "hold". Morgan Stanley stated that the group's strong operational capabilities in low-tier city shopping centers may benefit from the "Fifteen Five" consumption stimulus plan and maintain high single-digit rental growth under a higher market share. It is forecasted that as real estate sales decrease, the drag on performance from the group's developing properties will be alleviated, and profits will rebound in the next three years.