Company Coverage
Sun Hung Kai Properties (16 HK): FY26: DPS Up 4.3% yoy And Net Gearing Down To 10.7%; Further Market Recovery To Support Earnings In FY27
BUY (Maintained)
Current price:
Target price:
Upside:
HK$116.70
HK$143.80
+23.2%
Analyst
Analyst
Highlights
- Underlying net profit rose 4.6% yoy to HK$22.85b, broadly in line with consensus. DPS grew 4.3% yoy, implying a payout of around 50%. Net gearing sharply declined to 10.7%.
- Management targets HK$33b property sales in Hong Kong in FY27, and stays positive on market recovery. With the retail portfolio outperforming the market and office income stabilising, management holds a cautiously optimistic outlook.
- Trim our FY27/28 forecasts by 1.6%/2.9% respectively. Maintain BUY, target price unchanged at HK$143.80.
Analysis
- FY26: DPS up by 4.3% yoy; net gearing dropped to 10.7%. Sun Hung Kai Properties’ (SHKP) operating profit declined 3.6% yoy, as stable development profit and 1.0% yoy rental-profit growth — which accounted for 57.7% of segment profit — were more than offset by a 65.8% yoy fall in land-resumption gains. Underlying net profit (UNP) increased 4.6% yoy to HK$22.85b, broadly in line with consensus estimate of HK$23.3b, supported by a 23.1% yoy reduction in net finance costs and a 41.9% yoy increase in UNP from Dynasty Court sales. DPS rose 4.3% yoy to HK$3.91, implying a 49.6% payout ratio. The key positive was faster-than-expected deleveraging: net debt fell 27.5% yoy to HK$67.6b, while net gearing declined 4.4ppt yoy to 10.7%.
Highlights
- Underlying net profit rose 4.6% yoy to HK$22.85b, broadly in line with consensus. DPS grew 4.3% yoy, implying a payout of around 50%. Net gearing sharply declined to 10.7%.
- Management targets HK$33b property sales in Hong Kong in FY27, and stays positive on market recovery. With the retail portfolio outperforming the market and office income stabilising, management holds a cautiously optimistic outlook.
- Trim our FY27/28 forecasts by 1.6%/2.9% respectively. Maintain BUY, target price unchanged at HK$143.80.
Analysis
- FY26: DPS up by 4.3% yoy; net gearing dropped to 10.7%. Sun Hung Kai Properties’ (SHKP) operating profit declined 3.6% yoy, as stable development profit and 1.0% yoy rental-profit growth — which accounted for 57.7% of segment profit — were more than offset by a 65.8% yoy fall in land-resumption gains. Underlying net profit (UNP) increased 4.6% yoy to HK$22.85b, broadly in line with consensus estimate of HK$23.3b, supported by a 23.1% yoy reduction in net finance costs and a 41.9% yoy increase in UNP from Dynasty Court sales. DPS rose 4.3% yoy to HK$3.91, implying a 49.6% payout ratio. The key positive was faster-than-expected deleveraging: net debt fell 27.5% yoy to HK$67.6b, while net gearing declined 4.4ppt yoy to 10.7%.
BUY (Maintained)
Current price:
Target price:
Upside:
HK$116.70
HK$143.80
+23.2%
Analyst
Analyst
IMPORTANT NOTICE - DISCLOSURES AND DISCLAIMERS
This report is provided subject to, and must be read together with, the full Disclosures / Disclaimers available at this link, which are incorporated by reference into this report. In particular, this report is intended for general circulation and informational purposes only and does not constitute personal investment advice or a recommendation to buy or sell any investment product or security. You should independently evaluate the information and, where necessary, seek advice from a qualified financial adviser regarding the suitability of any investment. Analyst certifications required under applicable regulations, including SEC Regulation AC (where relevant), are included in this report. By accessing, receiving or using this report, you acknowledge that you have read, understood and agreed to be bound by the Disclosures / Disclaimers, as may be amended, supplemented or updated from time to time.
Related articles
25 Aug 2026
Kerry Properties (683 HK): 1H26: Branksome Crest Sale A Key Positive; Overall Development Momentum Intact
2 Sept 2026
Sino Land (83 HK): FY26: Results In Line; Strenghtened Cash To Support Landbank Expansion
31 Aug 2026
