Bank of America Securities: Average raised Hong Kong real estate stock target price by about 10%, Link REIT is the preferred stock for catching up.

Bank of America Securities released a research report stating that recent interactions with investors have shown diverging market opinions. Offshore general investors are more optimistic about the future of property prices in Hong Kong, while local, mainland and real estate fund investors are more concerned about whether valuations have already fully reflected. Overall, investors seem willing to overlook recent low yields and predict that the real estate market will enter a multi-year cyclical upturn. Based on this background, Bank of America Securities has narrowed the discount on net asset value targets and raised the average target price of several real estate stocks by 10% to reflect strong sales in Hong Kong development projects and high-end retail; and adjusted earnings per share forecasts for Sun Hung Kai Properties and New World Development for the 2025 to 2028 fiscal years based on updated development project completion times. On the developer side, Bank of America Securities is bullish on Cheung Kong Group and Sino Group, as their profits are highly sensitive to property price growth. For rental stocks, they prefer Swire Properties and HengLung Properties due to their high dividend yields and the resilience of luxury retail in mainland China. However, Link Real Estate Investment Trust is the bank's underperforming top pick, contrary to market consensus, mainly due to the widening gap in valuation with peers and short-term challenges in e-commerce already being reflected.