JPMorgan: Downgraded Hang Lung Properties (00101.HK) target price to HKD 10, with a dividend yield of approximately 7.1% being attractive; rating upgraded to "Overweight."

According to the Zhitong Finance APP, JPMorgan has released a research report stating that Hang Lung Properties (00101.HK) saw a 10% year-on-year decline in core net profit for the first half of the year, primarily impacted by a non-cash provision related to its Wuhan apartments. Excluding this provision, core net profit only declined by 2%, which is in line with expectations. The bank believes that the market's outlook on Hang Lung Properties is overly pessimistic, noting that the sales of its tenants in mainland malls increased by 17% year-on-year in the first half (24% in the first quarter, 9% in the second quarter). Management expects high single-digit growth in tenant sales for the second half of the year, which is better than the bank's expectations, reflecting strong performance from non-luxury brand tenants and a continuously diversified brand mix. The target price has been lowered from HKD 12 to HKD 10, based on a 63% discount to the forecasted net asset value per share (below the historical average of 1.5 standard deviations), to reflect the weak sentiment surrounding global luxury brands, while maintaining an "Overweight" rating.