Haitong maintains its 0435.HK buy rating, with a target price of HK $3.80 (equivalent to a dividend yield of 3.8 per cent), a 20 per cent discount to its net asset value of HK $4.70 per share at the end of fiscal November.

The Sunshine Real Estate Fund rose 2.04 per cent to HK $2.50 yesterday, helped by a 44 per cent increase in total distributable income in the year to December 2010 from a year earlier to HK $127.8 million and a 24 per cent increase in dividend per unit to HK $0.085. Assuming the full-year dividend per unit grows at the same rate as the 24 per cent growth in the first half of the year, the Sunshine Real Estate Fund's forecast dividend yield for the full year will be as high as 6.9 per cent, much higher than Thomson Reuters' forecast of 4.4 per cent for 0823.HK.

Haitong is still optimistic about the prospects of the Sunshine Real Estate Fund and expects the contribution of its three core properties to continue to increase in the second half of the year, benefiting from strong demand for second-tier office space and a good retail environment.