Lyon: Lower the target price for SINO LAND (00083) to HKD 11.3; the underlying profit is roughly in line with expectations.

Lyon released a research report stating that SINO LAND (00083) expects its basic profit for the fiscal year 2026 to decline by 6% year-on-year to HKD 4.789 billion, which roughly aligns with the bank's predictions. The bank has lowered its profit forecasts for fiscal years 2027 and 2028 by 3% and 8.2%, respectively, to reflect changes in project completion timelines. As a result, the target price has been reduced from HKD 12.1 to HKD 11.3 to account for recent unfavorable factors in the residential market. The rating of "outperform" has been reiterated. The bank believes that the profit decline is mainly affected by reduced interest income, increased tax expenses, and weakening net rental income. Even with the completion of three land acquisitions, net cash increased by HKD 5.7 billion to HKD 55.1 billion. The annual dividend per share remains at HKD 0.58, implying a basic payout ratio of 113% and a dividend yield of 5.7%. Its continuously increasing net cash position offers a gradually evident valuation gap compared to peers, providing ample capacity to seize investment opportunities while also mitigating the negative impact of potential interest rate increases.