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2026-11-09 13:09:37 JPMorgan said in a research report that Hong Kong developers rose 6% last week (versus a 5% gain in the HSI), led by an 8% rise in SHK PPT (00016.HK) and 6% gains in CK ASSET (01113.HK) and HENDERSON LAND (00012.HK). The broker believes the gains were mainly driven by the overall beta of Hong Kong equities, supported by declines in the US 10-year Treasury yield and HIBOR, but viewed the rebound as more attributable to short covering. The broker believes the current fundamentals of the residential market do not yet support a substantial re-rating, and therefore does not recommend chasing this rebound unless interest rate hike expectations materially change. The broker noted signs of slowing in the Hong Kong property market. The secondary home price index has declined for four consecutive weeks, with a cumulative drop of 1.3%, marking the first such occurrence in two years. The Centaline Property Valuation Index has fallen below 40, indicating banks are becoming more conservative in property valuations. Since 3Q26, more new projects have been priced at around a 10% discount to secondary home prices, reflecting developers' increasing caution. The broker reiterated its preference for landlords over developers, citing mild recovery in Hong Kong retail sales and the office market. Among developers, it prefers CK ASSET (01113.HK) due to its lower sensitivity to interest rate hikes and potential upside surprises from asset disposals. If interest rate hike expectations do not materially change, the broker believes HENDERSON LAND (00012.HK) may Underperform again after the recent rebound. However, if interest rate hike expectations ease significantly, HENDERSON LAND (00012.HK) and SHK PPT (00016.HK) may Outperform. Regarding mainland property developers, the broker noted the resilience of CHINA RES LAND (01109.HK) and CHINA OVERSEAS (00688.HK), which it believes may be driven by sector rotation, with funds seeking non-AI trades and flowing into large-cap Chinese property stocks, as well as capital rotation within the sector from small- and mid-cap state-owned developers to relatively safer CHINA RES LAND (01109.HK) and CHINA OVERSEAS (00688.HK). The market is also anticipating a bottoming out and recovery in profit margins. The broker assigned both CHINA OVERSEAS (00688.HK) and CHINA RES LAND (01109.HK) Overweight ratings, with TP at HKD16 and HKD40 respectively. CHINA JINMAO (00817.HK) fell 10% last week. The broker did not see any major company-specific news to explain the decline, believing it may be related to weak liquidity and concerns over highly leveraged state-owned developers triggered by the Huafa incident. The broker maintained a Neutral rating on CHINA JINMAO (00817.HK), with a TP of HKD1.18. (da)~ AASTOCKS Financial News Website: www.aastocks.com This article was automatically translated by AI, the Chinese version should be considered the authoritative version. AASTOCKS.com Limited does not guarantee its accuracy or completeness and accepts no liability for any damages or losses arising from the use of this translation. | |