JP Morgan expects that the involvement of New World Development's executive director in corruption will have limited impact, and is optimistic about the group's business diversification and prudent strategy

JP Morgan's research report indicates that media reports suggest that the executive director of SHK PPT (00016.HK), Feng Xiuyan, has been suspended by the group due to possible involvement in a corruption case. SHK has not commented on the matter. The reports indicate that the incident involves part of the "IAPM Mall" located in Shanghai's Huamao Plaza, related to the mall's marketing activities, bidding, advertising placement, and brand cooperation.

JP Morgan believes that even if the incident is true, its impact on the company's operations is limited, as Feng Xiuyan is not a core figure in the group, and it does not expect this to lead to a structural downgrade of the stock rating. However, SHK's stock price has outperformed the market by 23% this year (relative to the Hang Seng Index), and it cannot be ruled out that some investors may use this as an excuse to cash out for profits.

JP Morgan is optimistic about SHK's business diversification and prudent investment strategy, expecting its earnings per share and dividend payout ratio to remain stable for the fiscal year 2026. Although SHK has long been a barometer of the Hong Kong residential market, its valuation is currently not attractive compared to peers, and it recommends waiting for a better entry point; it gives a "neutral" rating with a target price of HKD 109