The Zhitong Finance App learned that CITIC Lyon released a research report saying that maintaining the Kerry E&C (00683) “buy” rating will benefit from a 10% dividend rate and a lower risk of falling dividends. The target price was lowered by 12% from HK$19 to HK$16.7.

The bank indicated that due to reduced real estate sales and gross margin, the profit forecasts for the 2024 and 2025 fiscal years were lowered by 21.1% and 27.9%, respectively; in response to intense competition in the Hong Kong housing market, the required yield spread (spread) was raised by 1% to 4%.

Furthermore, due to declining sales, Kerry E&C's core profit in 2023 fell 22.2% year over year, but the annual dividend remained at HK$1.35, with a dividend ratio of 10%. Despite the challenging macro environment and high debt ratios, management sees no need to cut dividends. CITIC Lyon believes that the company's strong rental income supports stable dividends.