Daiwa Capital Markets: Raises target price for WHARF REIC (01997) by 25% and maintains "Buy" rating.

Dahua Jiexian released a research report stating that it has raised the target price for WHARF REIC (01997) by 25%, from HKD 28.8 to HKD 36, maintaining a "Buy" rating. The firm has also raised its forecast for the company's basic net profit for 2026/2027/2028 by 17.3%/2.7%/2.1%, mainly considering: 1) revenue from the sale of Gateway Plaza; 2) lower net debt forecasts. Additionally, it has increased its expected dividends per share for 2026/2027/2028 by 40%/40%/39%, due to a higher payout ratio (90%). WHARF REIC reported a 6.2% year-on-year increase in basic net profit to HKD 3.311 billion for the first half of 2026, exceeding the firm's expectations, primarily thanks to a 26% reduction in borrowing costs, with an effective interest rate of 3.5%. The board has raised the payout ratio from 65% to 90%, resulting in a 42.4% increase in interim dividends per share to HKD 0.94. This significant adjustment demonstrates the management's strong confidence in the company.