GLONGHUI, September 28 | Morgan Stanley published a report stating that recurring income is the key to the sustainability of dividend payments. Changshi Group and Sun Hung Kai Properties's recurring equity free cash flow yield is higher than 10%, while other peers are far below this level. Henderson Land is only 2%, while New World Development is negative. According to the report, since the beginning of the year, Hong Kong real estate developers' stock prices have outperformed the Hang Seng Index by 13 percentage points, New World's mid-term dividend has been cut by 18%, and SHKP has used the payout ratio as an upper limit of the target range, meaning that dividends will be reduced in 2024. Currently, the valuation of real estate stocks is less than 0.5 times the market account rate, the price-earnings ratio is less than 10 times, and the net asset value (NAV) discount is more than 50%. The valuation is cheap. It is recommended that the free cash flow yield of current business be used to replace the dividend rate for selection. Among them, the free cash flow yields of medium and Changshi and Xindi current equity were 13.3% and 12%, respectively, which is very attractive. Sino Real Estate was 8.6%, benefiting from net interest income. The more negative was Henderson Land, which was only 2.4%, because projects under new development had large liabilities and did not generate short-term rental returns. New World's recurring revenue is lower than its net interest expenses.