Bank of America Securities: Swire A (00019) raises dividend, sending a strong signal. Current valuation is attractive, target price 90 Hong Kong dollars.

Bank of America Securities released a research report stating that it maintains a "buy" rating on Swire Pacific A (00019) with a target price of 90 Hong Kong dollars. Swire Group's performance last year slightly exceeded expectations, with a unexpected 13% increase in dividend per share signaling a strong message, consolidating Swire Group's solid record in shareholder returns. The management believes that its progressive dividend policy is sustainable, and expects dividend per share to maintain a steady growth in the mid-single digits per year. Due to restrictions on the circulation of shares, share repurchase remains a secondary option. The bank also continues to have optimistic views on its subsidiary SWIREPROPERTIES (01972) growth prospects, noting that the current stock price is at a 30% discount to net asset value, compared to a historical average discount rate of 18%, making the valuation attractive. Although rising oil prices add uncertainty to the profit outlook of CATHAY PAC AIR (00293), Swire Group's dividend policy clearly excludes the impact on Cathay's performance. The management expects the core business to continue to be stable, and notes that the impact of the Middle East conflict on businesses outside of Cathay Pacific Airlines has been limited.