Morgan Stanley: SINO LAND's first-half financial performance meets expectations, property development profit margins have bottomed out, and a "synchronized with the market" rating is given.

Morgan Stanley released a research report stating that SINO LAND (00083) has achieved results in line with expectations for the first half of the fiscal year 2026. The basic surplus profit for the period was approximately 2.22 billion Hong Kong dollars, which was roughly the same as the previous year. However, due to the expansion of the share base, the basic earnings per share decreased by 6.3% to 0.24 Hong Kong dollars. The interim dividend remains unchanged at 0.15 Hong Kong dollars. The bank believes that the option of paying dividends with shares may be suspended in the short term and expects the company to announce share repurchases and increased dividends at the end of the performance period. The bank currently maintains a "synchronize with the market" rating with a target price of 10.6 Hong Kong dollars. As of the end of December last year, the company's net cash increased by 1.9 billion Hong Kong dollars to 51.4 billion Hong Kong dollars compared to the first half of the year, mainly due to an increase in property sales receipts. Interest income declined by 14% year-on-year, affected by the decline in Hong Kong dollar interbank rates. With the recovery of property prices, the physical market continued to show strong momentum. The company recorded attributable sales of 6.4 billion Hong Kong dollars in the first half of the fiscal year 2026, and has also achieved contracted sales of 1.5 billion Hong Kong dollars so far this year. The bank expects that the profit margin of residential property development in Hong Kong may have bottomed out, and based on unrecognized sales of 4.6 billion Hong Kong dollars, as well as the higher expected profit margin of land purchased after 2023, the estimated profit margin will reach high single digits.