Lyon: Downgrade HYSAN DEV (00014) target price to HKD 20; Lee Garden benefits from the recovery of demand driven by luxury goods.

Lyon released a research report stating that HYSAN DEV (00014) will have stable performance in the first half of 2026, with resilient recurring profits, unchanged dividends per share, and retail performance consistently outperforming peers. Supported by an improved retail atmosphere, upgrades from luxury tenants, and an increase in foot traffic, the performance of Lee Gardens continues to surpass the broader Hong Kong retail market and benefits from a recovery in demand driven by luxury goods. Tenant sales have now returned to pre-COVID levels, providing support for positive rental adjustment renewals. The pace of capital recovery helps to reduce leverage and alleviate capital expenditure pressure. The bank has lowered Hysan's earnings forecasts for the fiscal years 2026 to 2028 by 3% to 14%. To reflect the expanded discount on net asset value in a more constrained U.S. interest rate environment, the target price has been reduced from HKD 25 to HKD 20, maintaining an "Outperform" rating.