CITIC CLSA lowers target price of LINK REIT (00823) to HK$48.5, reaffirms "outperform" rating.

China CITIC Bank International released a research report stating that due to the downgrade of DPU and the rise in US Treasury yields, the required dividend yield has increased, leading to a 1.4% decrease in the target price of LINK REIT (00823) from 49.2 Hong Kong dollars to 48.5 Hong Kong dollars. They reiterated their "outperform" rating and believe that the company is still one of the top choices. The bank stated that the performance of Link REIT in the 2026 fiscal year (ending March 31) basically met expectations, with a slight decrease in Distribution Per Unit (DPU) mainly reflecting the continued unfavorable trends in the Hong Kong and mainland China rental markets. Management has identified 5-10% of assets in the portfolio as non-core assets and indicated that these assets may be gradually disposed of. In addition, management has committed to using the net proceeds from the sale of Thomson Plaza for unit buybacks. The bank believes that reinvesting funds in unit buybacks will help improve DPU and shareholder returns.