JP Morgan: Hong Kong property prices are expected to slow down to 5% growth in the second half of the year, leading to a decrease in target prices for companies like Sino Land (00083).

JPMorgan Chase released a research report stating that, as of this year, the Hong Kong second-hand property price index has rebounded by 10.4%, rising 17.9% from its low, exceeding expectations, and has already reached the bank's previous forecast of 10-15% for the full year of 2026. While the bank maintains this forecast, it also means that property price growth in the second half of 2026 may slow to below 5%. Although the two major negative factors (capital outflow controls and interest rate hike concerns) have been widely discussed, the bank believes that the biggest downside risk is actually the sustained weakness of the Hong Kong stock market. Fortunately, other industry fundamentals (such as unsold unit inventory, rental increases, and population growth) remain strong, so the bank currently predicts that property price growth will slow down, but the upward cycle will continue. However, if the Hang Seng Index remains weak in the long term, property prices may face downward pressure. In the short term, the bank prefers CK ASSET (01113) and SINO LAND (00083). The target price for Sun Hung Kai Properties has been lowered by 13.8%, from 14.5 Hong Kong dollars to 12.5 Hong Kong dollars, with a rating of "hold". Henderson Land (00012) is expected to underperform the market, with the target price for Henderson Land lowered by 10%, from 30 Hong Kong dollars to 27 Hong Kong dollars, with a rating of "neutral". Meanwhile, the target price for SHK PPT (00016) has been lowered by 13.6%, from 162 Hong Kong dollars to 140 Hong Kong dollars, with a rating of "hold".