Morgan Stanley upgrades New City Holdings to overweight, citing better-than-expected rental growth and smooth selling of private REITs.

Morgan Stanley has upgraded its rating on New World Development to overweight, stating that the company has achieved better than expected rental growth by increasing market share, and has made positive progress in selling mature shopping mall businesses through private REITs. This will improve its cash flow, enhance the quality of its earnings, and ultimately strengthen its valuation. Morgan Stanley has raised the target price of the company by 25% to HK$19.7, and has increased its earnings per share forecast for 2026-2027 by 3-5%.