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Robust investment demand for La Marina

Investment Thesis

BUY with HK$32.40 TP. The stock is trading 70% below our appraised current NAV. The launch of La Marina is well
received, thus improving the sentiment towards the counter. The stock’s special dividend payment should further enhance its investment appeal.

Project sales to unlock value. The launch of 600-unit La Marina in Wong Chuk Hang has received enthusiastic initial
market response aided by strong investment demand. The second luxury development on Beacon Hill should go on sale in 4Q21. In China, new phases of Shenyang Arcadia Heights and Qinhuangdao Habitat will also be available for sale in 2H21.

Multiple channels to replenish land bank for long-term growth. After acquiring 50% stakes in two farmland sites in Yuen Long for residential usage conversion in May-21, Kerry Properties recently bought 17 agricultural lots in Kwu Tong for land banking. In China, the company joined hands with GIC to acquire a retail-led mixed-use site in Pudong,
Shanghai in Feb-21. In the year ahead, we believe that Kerry Properties will remain proactive in exploring land banking
opportunities in Hong Kong/China.

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Valuation:

Our target price (TP) is based on a target discount of 65% to our Jun-22 NAV estimates.

Where we differ:

We are positive that the company can make good use of proceeds from the deals to propel its long-term growth.

Key Risks to Our View:

Any deterioration in property demand in Hong Kong & China could drag its earnings and share price performance.
Any unexpected housing policy change could trigger a sector wide re-rating or de-rating.