Goldman Sachs: Raises target price for SWIRE PROPERTIES (01972) to HK$30, last year's performance meeting expectations.

Goldman Sachs released a research report stating that SWIRE PROPERTIES (01972) performed as expected in the 2025 fiscal year, with healthy rental income recovery and stable residential sales execution. The company has been given a "buy" rating, with the target price raised from HK$29 to HK$30. The report pointed out that SWIRE PROPERTIES reported a net loss of HK$1.5 billion in the 2025 fiscal year, mainly due to a HK$7.8 billion revaluation loss in its Hong Kong office portfolio caused by declining renewal rents, even though capital rates have decreased by 12.5 basis points. Excluding this loss, as well as income from the sale of Brickell City Centre, adjacent industrial land, and the 43rd floor of Island East Center, its recurring underlying profit decreased by 3% year-on-year to HK$6.26 billion, in line with the bank's expectations. This reflects a significant loss from pre-sales and market promotion expenses due to the launch of several residential projects in its property trading business. Rental income also decreased by 2% year-on-year to HK$6.8 billion due to the sale of the Brickell City Centre retail plaza. Partially offsetting these effects is the improvement in the performance of Hong Kong and mainland China hotel businesses, with increases in revenue per available room in every rented room in its portfolio.