BofA Securities: Expects Hong Kong property developers to be more cautious about raising prices, most developers' earnings per share have bottomed out.

Bank of America Securities released a research report stating that despite the escalating tensions in the Middle East, Hong Kong property developers continued to increase prices in March. However, most of the new batches have fewer units and are concentrated in the urban areas. Considering the recent stock market volatility, developers may take a more cautious approach towards price increases, especially for large-scale new projects. The bank believes that the performance of real estate stocks and integrated enterprises last year generally met expectations, with most of the profit differences coming from the timing of project revenue recognition. After the sector has seen profit-taking, the dividend yield of related stocks has become more attractive, and the earnings per share of most developers should have bottomed out last year. The bank has lowered its earnings per share forecast for 2026 to 2027 by 0% to 2%, and adjusted the target price of the shares by -11% to +14%. The bank is optimistic about SINO LAND (00083) and LINK REIT (00823). The former holds stable net cash, with a dividend yield above average and can capture the recovery of the residential market. The target price is maintained at HK$13.3. The latter has potential for asset disposals and share buybacks, with the target price maintained at HK$44. For investors with a higher risk appetite, they may consider HENDERSON LAND (00012) and SWIRE PROPERTIES (01972). The former has a compound annual growth rate of 9% from 2025 to 2028, and potential for land reclamation; the target price is HK$34.4. The latter has a rich pipeline of projects and stable shareholder returns; the target price has been raised from HK$29 to HK$30. All of these stocks have a "buy" rating. At the same time, the bank reiterated its "underperform" rating for MTR CORPORATION (00066), with high capital expenditure, and maintained the target price at HK$27.