CICC released a research report stating that it lowered Link Real Estate Investment Trust's target price by 15% to HKD 40, reflecting adjustments to profit forecasts and a more cautious approach to long-term forecasts. Due to continuing weakness in Hong Kong's retail trade, Link's forecast for 2025 dividend per unit (DPU) was lowered by 4% to HKD 2.57, and a forecast for 2026 DPU was introduced, holding stable compared to previous year, maintaining 'outperforming the industry' rating.
The report mentioned that Link's FYE 2024 results were in line with market expectations. Revenue and net property income (NPI) increased by 11% and 9.5%, mainly due to contributions from newly acquired properties. Due to a decrease of 4.3% and 5.4% in DPU and the fair value of the asset portfolio (NAV), the group's performance declined. The group performed steadily in the Hong Kong property industry, however, it was slightly differentiated in the mainland property industry. Retail properties showed slight recovery, with office buildings continuing to suffer, and the annual renewals adjustment rate was 2.8%, a decrease of 10.2%.
In addition, the group's investment real estate portfolio value decreased by 0.6% year-on-year, but the group's balance sheet remained healthy, with a debt ratio rising by 1.7 percentage points to 19.5%. China International Capital Corporation will continue to observe the recovery of the retail trade in Hong Kong, believing that supermarkets will face long-term challenges and recommending attention to the impact of changes in consumer trends on profits.