Building a better future.

Investment Thesis
BUY, HK$141.1 TP. The stock, trading at 54% discount to our appraised current NAV, is attractively valued. The imminent launch of Wetland Seasons Bay should serve as near-term share catalyst. Growing recurrent earnings stream led by rental property expansion should justify a higher long-term stock valuation.

Wetland Seasons Bay Ph 1 on sale shortly. We believe this mass market project would be popular among buyers judging from the strong market response to the launch of neighbouring Wetland Seasons Park. Elsewhere, The YOHO Hub in Yuen Long is expected to be released in 2H21. Given good transportation connectivity, this project should be well sought after.

Significant portfolio expansion to boost rental income. Longer term, profit growth should be driven by higher rental earnings instead of development income. Investment property portfolio in China will rise to 25msf by FY24 from the current 15msf upon the full completions of Nanjing IFC and Shanghai ITC. In Hong Kong, the How Ming Street commercial development is scheduled for
completion in 2023. Recently, SHKP has also secured sites for commercial development near the border in New Territories through public tender and usage conversion. Longer term, the two large-scale mixed-use developments at Guangzhou South Station and Hong Kong West Kowloon Station will further strengthen its rental income base. The new rental assets should add c.HK$7.2bn
p.a. to the company’s rental income upon the full operation.