Company Coverage
Kerry Properties (683 HK): 1H26: Branksome Crest Sale A Key Positive; Overall Development Momentum Intact
BUY (Maintained)
Current price:
Target price:
Upside:
HK$19.45
HK$27.80
+42.9%
Analyst
Analyst
Highlights
1H26 UNP dropped 9.4% yoy, while margin of Hong Kong property sales rose 5.8ppt yoy and net gearing declined 2ppt hoh. DPS was maintained.
Branksome Crest being converted to sale was a positive surprise, and will support both deleveraging (reducing net gearing by an estimated 5ppt) and earnings.
Maintain BUY with an unchanged target price of HK$27.80.
Analysis
1H26: Improved property sales margin and solid deleveraging, DPS maintained. Underlying net profit (UNP) was HK$782m (-9.4% yoy), which represents 43.2% of our full-year estimate. The yoy decline in UNP was mainly due to lower revenue recognition from the property sales segment ( 52.8% yoy) and lower interest capitalisation. In 1H26, higher margin of property sales and a steady growth in rental income were key earning drivers. Net gearing ratio dropped by 2.0 ppt (vs 2H25) to 31.3% for 1H26, reflecting the solid deleveraging process, supported by the receipt of sales of luxury residential projects in Shanghai. 1H26 DPS was maintained at HK$0.40/share.
Highlights
1H26 UNP dropped 9.4% yoy, while margin of Hong Kong property sales rose 5.8ppt yoy and net gearing declined 2ppt hoh. DPS was maintained.
Branksome Crest being converted to sale was a positive surprise, and will support both deleveraging (reducing net gearing by an estimated 5ppt) and earnings.
Maintain BUY with an unchanged target price of HK$27.80.
Analysis
1H26: Improved property sales margin and solid deleveraging, DPS maintained. Underlying net profit (UNP) was HK$782m (-9.4% yoy), which represents 43.2% of our full-year estimate. The yoy decline in UNP was mainly due to lower revenue recognition from the property sales segment ( 52.8% yoy) and lower interest capitalisation. In 1H26, higher margin of property sales and a steady growth in rental income were key earning drivers. Net gearing ratio dropped by 2.0 ppt (vs 2H25) to 31.3% for 1H26, reflecting the solid deleveraging process, supported by the receipt of sales of luxury residential projects in Shanghai. 1H26 DPS was maintained at HK$0.40/share.
BUY (Maintained)
Current price:
Target price:
Upside:
HK$19.45
HK$27.80
+42.9%
Analyst
Analyst
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