Morgan Stanley: Seazen (01030) is expected to reduce total borrowing with multiple financing options, target price raised to 3.17 Hong Kong dollars.

Morgan Stanley released a research report stating that SEAZEN (01030) has recently carried out a number of financing activities, including issuing US dollar bonds in February and conducting rights issue; the company has also submitted a public REITs (Real Estate Investment Trusts) application to the China Securities Regulatory Commission, planning to sell its undervalued shopping center assets. It is believed that the company's actions will lower total borrowing, thereby reducing interest expenses; by enhancing cash flow, it will significantly reduce its liquidity risk. Morgan Stanley updated the company's risk and return analysis, raising its earnings per share forecast for the next two years by 10% and 14%. At the same time, the weighted average cost of capital (WACC) was lowered from 10.7% to 10.4% to reflect its reduced risk; the target price was raised from HK$2.77 to HK$3.17; with a "hold" rating.