Citibank estimates that Yuexiu Real Estate Trust (00405)'s dividends have remained roughly flat this year, and capital costs have peaked.
The Zhitong Finance App learned that Citi released a research report stating that it maintained the “neutral” rating of Yuexiu Real Estate Trust (00405) and lowered the target price from HK$1.2 to HK$1.1. The company's dividends fell 26% year on year last year, office performance was weak, and financial costs increased. However, it is estimated that this year's dividends have remained roughly flat, and capital costs have peaked.
The report points out that interest expenses are expected to decrease as interest rates are lowered. It is estimated that interest expenses will be reduced by 60 million yuan this year. As RMB appreciates and funds are returned from non-core assets, the debt ratio is also expected to fall. The strong performance of retail properties and hotels will offset the impact of weak office buildings. It is estimated that non-office revenue will increase by 5% this year, average hotel rents will be higher than that of peers, food and beverage consumption will increase, and retail property traffic and sales will increase.