Jefferies raises Swire Properties price target to HK$18.80

Published 13/03/2025, 15:44
Jefferies raises Swire Properties price target to HK$18.80

On Thursday, Swire Properties (1972:HK) (OTC: SWPFF) saw its price target increased by Jefferies to HK$18.80, up from the previous HK$17.60. The firm has maintained its Buy rating on the stock. The adjustment follows Swire Properties’ report of its second-half 2024 underlying profit, which came in at HK$2.9 billion. This figure represents a 14% decrease year-over-year and a 19% decline from the first half of the year, aligning with Jefferies’ forecasts.

Swire Properties’ gross rental income displayed resilience, with a slight 2% drop year-over-year and a 1% fall from the first half of the year. The company experienced some softness in the Hong Kong market, where office rentals decreased by 5% year-over-year and 2% half-over-half, and retail rentals saw a 3% year-over-year and 2% half-over-half reduction. However, these declines were largely balanced by stable rental income from China, despite challenges including area closures for Asset Enhancement Initiatives (AEI) and currency headwinds from the Chinese Renminbi (RMB).

Management at Swire Properties noted a mildly positive sales growth in China and a narrowing decline in the Hong Kong market for the first two months of the year. In addition to the financial results, the company has increased its dividend per share (DPS) by 5%, which implies a yield of 6.7%. Furthermore, a new stock buyback program is under consideration, with a decision expected to be made closer to May 2025.

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