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CGS-CIMB and DBS analysts bet on attractive Hong Kong Land valuations

Ng Qi Siang
Ng Qi Siang8/3/2020 04:02 PM GMT+08  • 4 min read
CGS-CIMB and DBS analysts bet on attractive Hong Kong Land valuations
Hong Kong Land has had a tough first half, but constant dividend and attractive valuations are a silver lining.
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It has been a tough 1H2020 for property management group Hong Kong Land, which reported a 24% fall in underlying profit y-o-y to US$353 million ($485.9 million). Still, analysts from CGS-CIMB and DBS have recommended that investors load up on the counter on the back of attractive valuations. Interim distribution per share (DPS) remains constant at US$0.06.

Jeff Yau from DBS has recommended a “buy” call on the counter at a target price of US$4.80 with a 29% upside, though this was a reduction from its previous target of US$4.94. A CGS-CIMB team consisting of Raymond Cheng, Will Chu and Jeffery Mak have echoed this sentiment with an “add” call on the stock, reducing their target price to US$5.10 from US$6.05.

“The stock is trading at 67% discount to our assessed current net asset value (NAV), 2 standard deviations below its 10-year average. The current low valuation should cushion the downside risk on share price after factoring in the prevailing headwinds on the commercial sector in Central,” reports Yau. The CGS-CIMB team also likes the stock’s resilient investment property portfolio, estimating that it is currently trading at a 63% discount to its present NAV.

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