Morgan Stanley's research report pointed out that the market is overly concerned about the impact of weak luxury goods sales on China Res Mixc (01209.HK). The company is expected to maintain a per share earnings growth of over 20% in the fiscal year 2024-2025 through increasing operational leverage. The bank also pointed out that China Res Mixc's share valuation is attractive, with strong account receivables and a significant cash balance, which also brings significant upward space for the company's dividend.

According to Morgan Stanley, China Res Mixc is expected to maintain its significant retail sales performance and its strong mall operation ability will be more prominent even in macroeconomic adversity.

Morgan Stanley stated that with the improvement of China Res Mixc's operational leverage, the company's profit margin expansion is expected to maintain a compound annual growth rate of 40% in fiscal year 2020-2025, meaning that the average compound annual growth rate in fiscal year 2024-2025 will be higher than 20%. The bank also expects the company's management to gradually raise the regular dividend payout ratio from the current 55% to a mid-term target of 70%, and may declare a potential special dividend in late August this year to boost shareholder returns.

Taking all these factors into consideration, Morgan Stanley maintained China Res Mixc as a preferred shareholding and set its target price at 41.49 yuan, reaffirming its "shareholding" rating.