Goldman Sachs released a research report saying that Swire believes it has the ability to expand the retail and aviation industry in Hong Kong and the Chinese market, and that it will be more willing than its peers to carry out overseas mergers and acquisitions and distribute special interest. Based on a 25% discount on the net asset value expected for the 2024 fiscal year, the target price of Swire A (00019) for 12 months is 78 yuan, maintaining a “buy” rating.
The bank explained that Swire is actively seeking investment opportunities in the Greater Bay Area and will complete the acquisition of Coca-Cola bottling business in Thailand/Laos in the second half of 2024. The Group will seek a public listing on the Bangkok Stock Exchange in the future, and the bottling business will also be extended to the Thai market. Goldman Sachs predicts that these purchases may increase the company's profit by about 3-4 billion yuan, or account for 3%-4% of the group's profit. For overseas markets, Swire is looking for mergers and acquisitions in Singapore, Indonesia, and the Philippines.
According to the report, the company's management was satisfied with their 2023 financial situation and distributed about half of their recurring profits in dividends, while continuing to carry out HK$6 billion repurchases. Goldman Sachs raised Taikoo's core net profit by 2% to 10.6 billion yuan in 2024. Goldman Sachs believes that the increase in the price of Swire A is more due to the appreciation of Swire Properties (01972), which maintains a positive attitude towards Swire.