Hongkong Land narrows P/NAV discount, spurs interest in stock

Hongkong Land, perenially trading at a discount to its net asset value, announced on Sept 6 that it plans to invest up to US$500 million in a share buyback programme extending until December 31, 2022. Hongkong Land’s share price reacted positively, and has drawn attention to its still large discount to NAV. This alone could attract investors.

In addition, Hongkong Land reported a net loss of US$865 million in 1HFY2021, compared to a net loss of US$1.83 billion in FY2020.However, underlying profit to shareholders rose 12% to US$394 million. Annualised, this translates into an ROE of just 2.3%.

“The purpose of the share buyback is to reduce the capital of the Company. As the holding of treasury shares is not provided for in the Company's constitution, any shares which are repurchased by the Company will be cancelled,” Hongkong Land said in a statement.