JP Morgan: SHK PPT (00016) mid-term profit far exceeds expectations, target price 162 Hong Kong dollars.

JPMorgan has released a research report stating that SHK PPT (00016) saw a 17% year-on-year profit growth in the first half of the 2026 fiscal year, far exceeding the bank's expected 4% increase. This was mainly due to property profits in mainland China far exceeding expectations. JPMorgan has upgraded its rating on New World to "buy" with a target price of 162 Hong Kong dollars. For the first time in three years, New World has increased its mid-term dividend by 3%, showing management's confidence. The net debt ratio has also improved from 15.1% to 13.5%. With property profit margins in Hong Kong likely to rebound from 8% to double-digit levels, JPMorgan expects New World's annual compound profit growth rate to reach 6% over the next three years. If sales momentum is stronger than expected, there is even more upside risk to profitability. JPMorgan believes that among many Hong Kong property developers, New World offers the clearest profit growth prospects. This, along with its ample saleable resources, allows it to capture market recovery opportunities and continue to support its valuation premium due to its scarcity value. The bank believes that the Hong Kong residential market has transitioned from the "early recovery" phase to the "expansion phase", and expects the discount of New World's net asset value per share to gradually narrow from the current 34% to 22%.