【英文】J.P. 摩根报告：香港房地产：黑暗中的航行Hong Kong Property Navigating the darkness（59P）

New World Development: This is the only OW developer with a residential angle.  Assuming there is a 30% drop in residential prices and the rental value of its  commercial properties, NWD's valuation is still highlighting upside from current  levels. It is also the developer that will likely see the most substantial rental increase  (HK rental base to double in FY21/22) as the Victoria Dockside has all opened and  rental will gradually ramp up over the next 2-3 years. On the other hand, we believe  the only type of residential projects which are still selling well is the mass market  product of which NWD will have a 3,000-unit to be launched in Tai Wai early 2020.  We believe the current NAV discount of 65% has priced in the lingering worries of  high gearing, which could be alleviated as they launch their Tai Wai project and  enbloc industrial buildings.  Link REIT: Management has reiterated manifold measures to return capital to  shareholders including debt repayment and special distribution, in addition to unit  buyback of which the company has set a target of buying 60m shares in the current  financial year. This could allow more flexibility for management amidst dynamic  market conditions and if any acquisition/disposal decisions narrow their repurchase  window. We are also confident in their 8-9% DPU growth with 1) on track preleasing at The Quayside, 2) strong reversions of their newly acquired China  properties and 3) future acquisitions. The company is mainly operating nondiscretionary shopping malls in Hong Kong and China, which make its business less  prone to the impact from economic slowdown.

We are downgrading Sino Land, Hysan, Swire Properties and Wharf REIC to UW  and Kerry Prop and Wheelock to N. With the 30% and 40% decline in retail and  office rental in our worst-case assumptions, it's not surprising that the retail/office  landlords like Hysan, Swire Prop and Wharf REIC will feel the most negative impact  on their operations. These stocks have also outperformed Hongkong Land’s  valuation by a wide margin.  On the developers, Kerry Prop and Sino Land are in the camp lacking catalysts in the  near term; Sino also has higher residential and commercial property exposure than  Kerry Prop. Although Wheelock also has more resilient mass residential exposure,  given the outlook of retail and the negative impact of Wharf REIC, we believe this  will weigh on Wheelock’s share price performance.