<div id="readability-page-1"><div>BofAS published a research report stating that renewed concerns over potential US rate hikes have triggered a recent correction in Hong Kong property stocks. While the broker expects the market’s priced-in scenario of one to two rate hikes will not lead to a decline in Hong Kong property prices, it acknowledged that a more aggressive interest rate path would pose risks. Coupled with uncertainties arising from new outbound direct investment (ODI) regulations in mainland China and the weak performance of the HSI, BofAS expects primary residential sales momentum to slow in 2H26, with property prices seeing only mild growth (compared with a cumulative 10% increase year-to-date). It slightly revised its 2027 Hong Kong property price growth forecast from a 5% increase to flat to 5% growth.Based on a more moderate property price outlook, along with slight downward revisions to some developers’ net asset value per share forecasts and wider target discounts, the broker cut TPs for Hong Kong property developers by an average of 9%. However, BofAS expects moderate US rate hikes to have limited impact on landlords.In terms of stock preferences, BofAS favors LINK REIT (00823.HK) -0.200 (-0.560%) Short selling $219.76M; Ratio 25.920% among landlords (expecting share buybacks to resume soon) and SWIREPROPERTIES (01972.HK) -0.800 (-3.781%) Short selling $52.89M; Ratio 18.987% and Hongkong Land (benefiting from rental growth in Central offices). Among developers, it prefers cash-rich CK ASSET (01113.HK) +0.020 (+0.045%) Short selling $32.20M; Ratio 10.659% and SINO LAND (00083.HK) -0.390 (-3.562%) Short selling $182.89M; Ratio 49.393% . The broker maintains an Underperform rating on NEW WORLD DEV (00017.HK) +0.010 (+0.142%) Short selling $8.54M; Ratio 11.978% (affected by high leverage) and MTR CORPORATION (00066.HK) -0.600 (-1.904%) Short selling $349.31M; Ratio 67.668% (impacted by high capital expenditure).Details of the revised TPs and ratings for developers are as follows:CK ASSET (01113.HK) +0.020 (+0.045%) Short selling $32.20M; Ratio 10.659% | Buy | HKD53.5 -&gt; HKD53 HENDERSON LAND (00012.HK) -0.460 (-1.780%) Short selling $96.68M; Ratio 29.244% | Buy | HKD34.4 -&gt; HKD31.7 SHK PPT (00016.HK) +0.600 (+0.532%) Short selling $497.39M; Ratio 21.469% | Neutral | HKD136 -&gt; HKD122 SINO LAND (00083.HK) -0.390 (-3.562%) Short selling $182.89M; Ratio 49.393% | Buy | HKD13.5 -&gt; HKD12.2 NEW WORLD DEV (00017.HK) +0.010 (+0.142%) Short selling $8.54M; Ratio 11.978% | Underperform | HKD5.2 -&gt; HKD4.9 WHARF HOLDINGS (00004.HK) -0.720 (-3.846%) Short selling $14.86M; Ratio 18.350% | Neutral | HKD26 -&gt; HKD21 KERRY PPT (00683.HK) -0.290 (-1.568%) Short selling $3.47M; Ratio 6.721% | Buy | HKD26.2 -&gt; HKD23On sector outlook, BofAS noted that the Central office market could benefit from potential tax incentives. Channel checks indicate that Hong Kong is considering exempting fund managers from investment profit tax, which has already triggered expansion demand from hedge funds for office space. This is expected to support rental upside for core Central assets (such as IFC) and generate positive valuation premiums for quality portfolios such as Hongkong Land and SWIREPROPERTIES (01972.HK) -0.800 (-3.781%) Short selling $52.89M; Ratio 18.987% . The broker raised its 2026 Central office rental forecast from a YoY 5% increase to a 5%-10% increase.In the retail segment, a strong USD may weaken Hong Kong’s appeal to tourists from SE Asia, but the appreciation of RMB year-to-date helps support mainland demand. Meanwhile, mass-market retail performance continues to stabilize, as reflected in trends seen at LINK REIT and supermarket operators. (ad/da)(HK stocks quote is delayed for at least 15 mins.Short Selling Data as at 2026-06-18 16:25.)</div></div>

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BofAS cut target prices for Hong Kong property developers by an average of 9%, citing expected slowdown in primary residential sales momentum and mild property price growth due to US rate hike concerns, mainland ODI regulations, and weak HSI performance. The broker favors cash-rich developers like CK Asset and Sino Land, while maintaining an Underperform rating on New World Development. Additionally, BofAS raised its 2026 Central office rental forecast to 5%-10% YoY, benefiting landlords like SWIRE Properties and Hongkong Land.

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NEW WORLD DEV

SINO LAND

CK ASSET

HongkongLand USD

SWIREPROPERTIES

LINK REIT

MTR CORPORATION

HENDERSON LAND

SHK PPT

WHARF HOLDINGS

KERRY PPT

Hang Seng Index

SHK PPT-R

Wharf Holdings

BofAS Expects Property Price Growth to Slow, Cuts TP on Hong Kong Developers by Avg 9%