Goldman Sachs: Jardine Matheson target price raised to 102.1 Hong Kong dollars, dividend increase brings surprises.

Goldman Sachs released a research report stating that it has adjusted its profit forecast for the next two years for Swire Pacific Limited (00019), with the change ranging from a 9% decrease to a 2% increase. The target price has been raised from HK$96.8 to HK$102.1. The "buy" rating for Swire Pacific Limited and Swire Properties Ltd. (01972) has been maintained. Swire Pacific Limited announced its full-year performance for the year ending in December last year, with a slightly positive surprise being an increase in the final dividend, which grew by 19% to HK$2.5 per share. Along with the interim dividend, the total dividend for the 2025 fiscal year is HK$3.8 per share, representing a 13% increase from the previous year. Goldman Sachs speculates that this may be partly attributed to the lack of share buybacks after the completion of the HK$6 billion buyback plan in May 2025. When asked about the possibility of another share buyback plan, the management did not rule out the possibility and mentioned liquidity and public shareholding as factors to consider. Goldman Sachs points out that the management expressed cautious optimism about the business prospects at the earnings briefing, and expects its three core segments to perform well despite macroeconomic uncertainties. Swire Properties has five build-to-rent projects in mainland China that will be launched gradually from the fiscal years 2026 to 2028; coupled with the acceleration of selling its residential property portfolio, the company expects its contribution to the group's earnings to grow at an annual compound growth rate of 11% during this period. In Hong Kong, the signs of recovery in the residential and office markets since the second half of the 2025 fiscal year are encouraging. Regarding the beverage business, the management believes that fundamental factors will improve, especially in mainland China. However, CATHAY PAC AIR plans to utilize the new third runway at Hong Kong International Airport in the 2026 fiscal year to expand its passenger and cargo capacity. In other words, the recent Middle East conflict and surge in oil prices may pose downside risks to its profit growth.