Morgan Stanley: HYSAN's performance last year exceeded expectations, maintaining a "Market Perform" rating

Morgan Stanley published a research report indicating that HYSAN DEV (00014.HK) will see a 9% year-on-year decline in net profit to HKD 1.393 billion for the fiscal year 2025, excluding perpetual bond distributions, which is 9% higher than the bank's forecast. This is believed to be mainly supported by the resilient performance of Hong Kong's retail business in the second half of last year and the stabilization of the office business. The annual dividend per share remains unchanged at HKD 1.08, flat year-on-year, with a dividend yield of approximately 4.7%.

During the period, HYSAN made an impairment provision of HKD 805 million for its Hong Kong joint venture projects, an increase from HKD 258 million in 2024, with an impairment of HKD 775 million expected in the second half of 2025. The EBIT for the residential business fell by 28% year-on-year, which Morgan Stanley believes may be due to a decrease in available rental units. Morgan Stanley maintains HYSAN's "in line with the market" rating, with a target price of HKD 19