UBS: Maintains "Buy" Rating on WHARF HOLDINGS (00004) with a Target Price of HKD 27.

UBS released a research report stating that it maintains the Buy investment rating and target price of HKD 27 for WHARF HOLDINGS (00004). The bank noted that Wharfs basic profit for the first half of the year was HKD 1.7 billion, a 17% year-on-year decrease, which was below its expectations. The primary reason for this decline was a reduction in dividend income due to the partial divestment of its equity investment portfolio. Excluding a one-off impairment loss of HKD 547 million related to its properties in China, the basic profit would be HKD 2.2 billion, which aligns closely with the bank's expectations. UBS expressed surprise that Wharf announced a special interim dividend of HKD 0.20 per share to celebrate its 140th anniversary. Additionally, the company declared an ordinary interim dividend of HKD 0.20 per share, the same as the previous year. Unlike its sister company, Wharf Real Estate Investment (01997), Wharf has no plans to revise its dividend policy and continues to commit to distributing 30% of its basic profits. As of June 2026, the groups net cash position is HKD 6.2 billion, up from HKD 2 billion at the end of FY 2025, mainly due to the sale of HKD 3.2 billion in equity investments. The equity investment portfolio decreased by 7% quarter-on-quarter to HKD 40.1 billion, comprising 44% in properties, 27% in new economy investments, and 29% in financial and other assets. UBS indicated that, given that 36% of Wharf's total asset value is related to ultra-luxury residential assets in Hong Kong, the bank believes these assets are expected to benefit from AI-driven wealth creation, and thus it remains optimistic about Wharf. The stock currently has a price-to-earnings ratio of 0.43 times, with current assets (net cash plus equity investment portfolio) accounting for approximately 74% of its market value.