According to DBS, 89% of the company's borrowing is floating interest rate, and potential interest rate reduction in the short term should be favorable for the company's profit outlook and valuation, becoming a short-term catalyst.
Zhongtong Finance app learned that DBS released a research report stating that it maintains a "buy" rating on Wharf REIC (01997), and lowers the target price from HKD 27.4 to HKD 26.85. The current stock price is equivalent to a discount of 69% of the net asset value (NAV), which is much higher than the average discount level of 41% since listing, and even considering the increased economic uncertainty, the valuation is still not expensive.
The bank pointed out that 89% of the company's borrowing is floating interest rate, and potential interest rate reduction in the short term should be favorable for the company's profit outlook and valuation, becoming a short-term catalyst. The bank also pointed out that the company owns two iconic shopping malls in Hong Kong, Harbour City and Times Square, both of which are popular shopping destinations for tourists and locals. Even if the Hong Kong retail market is recovering at a slower pace than expected, many luxury brands in Harbour City have expanded after the epidemic, further consolidating the company's leading position as the leader of the Hong Kong luxury retail concept.
