INTERIM REPORT 2024
Hong Kong stocks are volatile | Champion real estate investment trust (02778) fell nearly 3%, the company's DPU continues to decline, Citigroup downgraded its rating to "sell".
Champion Real Estate Investment Trust (02778) fell nearly 3%, as of press time, fell 2.69%, to HKD 1.81, with a turnover of HKD 2.1763 million.
Citigroup: Champion Real Estate Investment Trust downgraded to 'sell' with target price lowered to HKD 1.5.
Citigroup's research report states that due to the long-term negative performance of office buildings and continuously high interest rates, Champion Real Estate Investment Trust (02778) is expected to see a 13% year-on-year decline in DPU in the 2024 fiscal year, and a 4% year-on-year decline in DPU in each of the 2025 and 2026 fiscal years. Considering the continued decline of DPU, the bank has lowered Champion's target price from HKD 1.59 to HKD 1.5 and given it a "Sell" rating. The bank expects the full-year DPU for the 2024 fiscal year to drop by 13% year-on-year, mainly due to the continued negative growth of re-leasing rents for its property Garden Road No.3, and the lease renewal situation for 2025 fiscal year.
UBS Group: Maintains a "Neutral" rating for the Champion Real Estate Investment Trust with a target price increase to HKD 1.74.
UBS Group released a research report stating that the operating performance of Champion Real Estate Investment Trust (02778) in the first half of the year met expectations, benefiting from the good performance of joint ventures. The mid-term distribution per fund unit decreased by 13% year-on-year to 8.09 cents, higher than the bank's forecast, and the distribution rate remained at 90%. The income and rental income also broadly met expectations, maintaining a "neutral" rating and increasing the target price from HK $1.61 to HK $1.74. The report stated that the occupancy rate of Langham Place Office Building during the period was 87.1%, a significant drop of 6.2 percentage points from the end of last year's 93.3%, and the occupancy rate of Garden Road No. 3 office building also dropped from the end of last year's 82.8%.
Citigroup: Champion Real Estate Investment Trust (02778) given a 'sell' rating, target price lowered to HKD 1.5.
Citigroup expects that the DPU of Champion Real Estate Investment Trust (02778) in the 2024 fiscal year will decline by 13% compared to the previous year.
UBS Group: maintains a "neutral" rating on Champion Real Estate Investment Trust (02778), with a target price raised to HK$1.74.
Due to the current rent for office buildings in the same area being only HKD 70 to 80 per square foot, there is a certain gap compared to the rent of HKD 80 per square foot for the expiring lease. Therefore, UBS Group predicts that the downward trend in rent will continue.
