HSBC issued a report saying that SOHO China (00410.HK) has 64% upside and maintains its buy rating, lowering its target price from 7 yuan to 6.10 yuan.

According to HSBC, SOHO China proposes to declare and pay a special dividend of 0.348 yuan per share, or 11.5 per cent, from the share premium account. Although the dividend is related to the company's sale of the Bund 8-1 real estate project, it undoubtedly confirms the company's dividend policy and brings confidence to investors. The bank pointed out that the sale of the Bund 8-1 real estate project would bring the company a net cash of 5 billion yuan, excluding special dividends, which would reduce the net debt ratio in the second half of the year by 6 percentage points to about 20% compared with the first half of this year.

The bank raised its earnings per share forecast for this year by 140 per cent, mainly reflecting sales earnings of 1 billion yuan, keeping next year's profit forecast unchanged, and lowering its earnings forecast for fiscal year 2017 by 30 per cent to reflect lower rental income due to asset sales. The bank lowered its net asset value forecast by 13% because of its previous forecast of 15.5 billion for the Bund 8-1, which was significantly higher than its selling price.