Zhongtong Finance APP learned that Citigroup issued a research report stating that it reiterates a "buy" rating for Hong Kong stock - SS (02638), taking into account that the interest rate cuts in the United States may bring value revaluation. It believes that the sustainable average annual interest rate of 5.9 basis points from 2024 to 2028 is expected, and the profit forecast for the company from this year to 2026 is reduced by 1.9% to 2.2%. It is expected that most capital expenditures will be invested from 2024 to 2028, and the target price will be reduced from HK$6.2 to HK$6.15.

The mid-term unit net profit of Hang Seng China-SS decreased by 3.6% year-on-year to HKD 0.947 billion, accounting for 30.1% of the market's forecasted annual net profit, which is similar to the average of 30.3% from 2019 to 2023. The profit decline was due to the net decrease in asset value based on profit control plan. The capital expenditures during the period were only HKD 1.375 billion, which is less than the depreciation of HKD 1.478 billion. The bank expects the company's asset base to increase in the future, as the Hong Kong government has approved a capital expenditure of HKD 22 billion for the company between 2024 and 2028, averaging HKD 4.4 billion per year.

Citigroup pointed out that since its listing in 2014, the average unit dividend yield of Hang Seng China-SS was 5.27%, which is 2.85 percentage points higher than the average yield of the US 10-year treasury bond. The bank has assumed that the Federal Reserve will cut interest rates by 2.25% until the middle of next year, and also believes that the interest rate risk of Hang Seng China-SS is low, as 74% of its debt is fixed interest, with an average debt cost of 3.3% to 3.5% in the first half of the year.