Analysts mixed on outlook for Sun Hung Kai Properties’ shares after slight profit rise
Sun Hung Kai Properties says net profit for the recently concluded financial year rises 1.2 per cent from a year earlier
On Friday, Morningstar cut its price target for SHKP to HK$105 from HK$115, but said the company was trading at a good discount. UOB Kay Hian and Morgan Stanley said the earnings were largely in line with expectations. The US investment bank had an overweight recommendation and expected earnings per share of HK$7.56 this year, up from a year earlier.
SHKP’s shares closed 0.8 per cent higher at HK$92.15 on Friday after the company said a day earlier that its net profit for the financial year that ended in June rose 1.2 per cent to HK$19.27 billion (US$2.47 billion) from HK$19.04 billion a year earlier. The company’s underlying profit rose 0.5 per cent to HK$21.85 billion.
The company’s net profit missed a consensus estimate from nine analysts by 10 per cent, according to Bloomberg. Underlying profit missed the mark by 2.5 per cent and sales undershot estimates by 2.9 per cent.
“We anticipate continued pressure on housing prices and developer margins due to elevated inventory levels which should improve gradually as investor sentiment strengthens, driven by better rental yields and absorption of excess inventory,” said Xavier Lee, an equity analyst at Morningstar.
SHKP’s contracted sales came in at a five-year high of HK$42.3 billion, Lee added.