What the broker says

PUBLISHED : Sunday, 12 October, 2003, 12:00am
UPDATED : Sunday, 12 October, 2003, 12:00am

Standard and Poor's has initiated coverage of Henderson Land Development with a designation of 'accumulate', with a 12-month price target of $33.40.

The ratings agency says early signs of a turnaround in Hong Kong's residential property market, due in part to an economic boost from Cepa, will translate into improved earnings for the land developer.

The firming of the property market should allow Henderson Land to offload loss-making projects, one of the major drags on share prices during the last year. The $33.40 price target represents a 10 per cent discount to net asset value, estimated to be $37.12.

Higher margins on property sales are expected to boost profits to $761 million in 2004 and $1.671 billion in 2005, according to S&P estimates.

Henderson closed on Friday at $32.60.