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<Research>JPM: HK Property Developers Unlikely to Fully Immune to Macro Uncertainties of Mideast Conflict; CKA Upgraded to Overweight
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Although the results performance of Hong Kong property developers beat expectations broadly, the outlook for 2Q26 suggested that the sector is unlikely to be completely immune to the macro uncertainties arising from the recent Middle East conflict, JP Morgan said in its report. The main concern is the potential for interest rate hikes, but the broker's base case assumes that rates will remain intact until 1Q27. While the impact on the Hong Kong residential market has been minimal since the outbreak of the Iran war, JP Morgan is leaning towards defensive stock selections. Therefore, it upgraded CK ASSET (01113.HK) to Overweight, as it is about to transition to a net cash position. The target price was raised from HKD48.5 to HKD52. Meanwhile, the broker downgraded HENDERSON LAND (00012.HK), which is more sensitive to interest rates, and WHARF REIC (01997.HK), which has higher uncertainty in EPS and DPS, to Neutral. The target price for the former was reduced from HKD35 to HKD30, and for the latter from HKD29 to HKD23. The broker's sector top picks include developers such as SINO LAND (00083.HK), SHK PPT (00016.HK), and CK Asset; landlords SWIREPROPERTIES (01972.HK) and Hongkong Land. The broker was also optimistic about CKH HOLDINGS (00001.HK) among conglomerates, given soaring oil prices. AASTOCKS Financial News Website: www.aastocks.com |
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