UBS: Hang Lung Properties (00101) rated as "neutral" with a target price of 9.6 Hong Kong dollars.

UBS released a research report stating that it gives a target price of HKD 9.6 for HANG LUNG PPT (00101) and a "neutral" rating. The report quoted HANG LUNG PPT as stating that tenant sales growth slowed to 15% year-on-year in April 2026, lower than the 24% in the first quarter of the fiscal year 2026, mainly due to weak performance in jewelry and some luxury brands. However, management pointed out that the overall momentum of flagship shopping centers remains strong and stable, even excluding the gold business. The company emphasized the high correlation between tenant sales and rental income. However, the continuous negative growth in rents in Wuhan and Shenyang continues to impact overall rental income. Henglong's new shopping center, Westlake 66, in Hangzhou, achieved an initial occupancy rate of 70%. The company expects the project to reach a committed occupancy rate of 91% in the third quarter of 2026, and anticipates achieving positive operating cash flow next year after paying pre-opening costs in 2026. One of the five office towers in Westlake 66 has already been fully leased to a tenant in the education industry. Looking ahead, a planned expansion of the exclusive exhibition pavilion in Westlake 66 is scheduled to open in the fourth quarter of 2026, with management expecting immediate profit contribution. In Hong Kong, HANG LUNG PPT stated that its office and retail property portfolios have remained stable so far this year. Rental renewals for the company's retail properties have continued to decline slightly, but there are early signs of stabilization. On the office tower side, the company reported slight growth. Rental for its serviced apartments continues to increase, helping offset the decrease in total rental income. Looking ahead, the company plans to accelerate the sale of residential assets in Hong Kong.