The report from HSBC Research indicates that investors welcome the measures taken by Swire Properties (00019.HK) to enhance shareholder returns, but believe that growth potential is not fully reflected in the stock price. Further streamlining of the business portfolio and a new round of repurchase plans may help reduce the company's discount. Even in soft market conditions, the bank believes that the mainland real estate business can lead the next round of growth, upgrading the rating from 'hold' to 'buy', with the target price raised from 69 yuan to 74.9 yuan.

The bank points out that the company's latest growth strategy is clear, focusing on expanding the project pipeline in real estate, scaling up the beverage business, and repositioning in aviation. For the bank, the plan to invest 50 billion yuan in the mainland, expanding the real estate portfolio from six retail-focused projects to eleven, is a key turning point. The bank also expects that with improved cash flow, there will be more repurchases. The dividend per share is expected to grow at a compound annual growth rate of 5% from 2023 to 2026, with dividends of 3.4 yuan, 3.55 yuan, and 3.7 yuan per share respectively from 2024 to 2026, making Swire an attractive option for investors seeking good defensive qualities. (vc/u)

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