Analyst Praveen Choudhary of Morgan Stanley maintained a Hold rating on Kerry Properties, retaining the price target of HK$17.80.
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Praveen Choudhary’s rating is based on a combination of factors that reflect Kerry Properties’ current financial performance and market conditions. The company’s underlying profit for the first half of 2025 saw a significant decline of 30% year-over-year, primarily due to reduced development property margins and rental income, as well as higher taxation and operating expenses. Despite these challenges, the interim dividend per share remained flat year-over-year, offering a notable dividend yield of 6.5%.
On a positive note, contracted sales showed a substantial increase of 130% year-over-year, driven by strong contributions from key projects in Shanghai and Yuen Long. However, the gross margin for Hong Kong development properties decreased, and there was a recorded gross loss for China development properties, indicating margin pressures. Additionally, rental revenue faced a decline due to challenging office markets and renovation disruptions. Improvements in net gearing and a decrease in cash interest expenses were observed, yet these were offset by reduced capitalized interest. Overall, these mixed financial indicators and market conditions contributed to the Hold rating.
Choudhary covers the Consumer Cyclical sector, focusing on stocks such as Galaxy Entertainment Group, Wynn Macau, and Melco Resorts & Entertainment. According to TipRanks, Choudhary has an average return of 4.2% and a 50.00% success rate on recommended stocks.
In another report released yesterday, TR | OpenAI – 4o also reiterated a Hold rating on the stock with a HK$20.50 price target.