Hongkong Land: Maybank-KE expects Hongkong Land's upcoming FY14 results (out on 5 Mar) to come in line with estimates, and is keeping an eye out for vacancy rates at its HK offices, rental reversions and cap rates for further upside potential.
With HK Central offices benefiting from rising demand from Chinese companies since the launch of the Shanghai-HK Stock Connect, the possibility of a Shenzhen-HK link-up is expected to fuel further demand from Chinese corporates.
Furthermore, latest data from Hudson revealed that hiring demand from the financial sector in HK is at a four-year high, and with tight vacancy, this could point towards higher office rental rates ahead.
Meanwhile, property development income (contributed 50% to FY13 revenue) is expected to be supported by Singapore's fully-sold Terrasse and Uber 388, along with some contributions from Serenade in HK and China projects.
Separately, the potential MSCI Hong Kong inclusion in November would be a positive catalyst for the counter.
Maybank-KE maintains its Buy rating and TP of US$8.56, pegged to a 25% discount to its book estimate of US$11.40.
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