Bank of America: Most Hong Kong developers have already reached bottom line per share earnings, optimistic about Sun Hung Kai Properties and Link REIT.

Bank of America Securities released a research report indicating that although tensions in the Middle East are escalating, Hong Kong property developers continued to raise prices in March. However, most of the new batch units have fewer quantities and are concentrated in urban areas. Considering the recent stock market volatility, developers may be more cautious about raising prices, especially for large new projects. After the sector has taken profit, the dividend yields of related stocks have become more attractive, and the earnings per share of most developers should have bottomed out last year. The bank has revised down its earnings per share forecast for 2026 to 2027 by 0% to 2%, and adjusted the target price of stocks by -11% to +14%. The bank is optimistic about Sun Hung Kai Properties and Link, the former holding a stable net cash position, a dividend yield above average, and can capture the recovery of the residential market, with a target price of 13.3 Hong Kong dollars; the latter has the potential for asset disposal and share buybacks, with a target price of 44 Hong Kong dollars. Investors with higher risk appetite may want to pay attention to Henderson Land Development and Swire Properties, both of which have a "buy" rating; the former has an average annual compound growth rate of 9% for earnings from 2025 to 2028, and has potential for land acquisition, with a target price of 34.4 Hong Kong dollars; the latter has a rich pipeline of projects, stable shareholder returns, and its target price has been raised slightly from 29 Hong Kong dollars to 30 Hong Kong dollars.