DBS analyst Jeff Yau maintained a Buy rating on Henderson Land Development Co (HLDVF – Research Report) on March 22 and set a price target of HK$28.10.
Jeff Yau’s rating is based on a blend of strategic factors and financial indicators that suggest Henderson Land Development Co. is poised for a positive shift in value. Although the company’s FY23 underlying earnings were slightly below expectations, this was mainly due to weaker development income, which is projected to improve. The stability in final dividends, coupled with the robust property sales following the lifting of government property restrictions, underpin the rationale for a Buy rating. Additionally, the company’s accelerating residential sales are expected to narrow the discount to its Net Asset Value (NAV), supporting the potential for growth in the stock’s price.
Moreover, Henderson Land Development Co.’s position as the largest agricultural landowner in Hong Kong is a significant advantage, especially with the planned development of the Northern Metropolis, which has garnered market attention. The government’s initiatives in the area are expected to facilitate the conversion of agricultural land to residential or other uses, allowing the company to secure land at favorable costs. Positive news flow regarding the Northern Metropolis, along with the improvement in the company’s recurring income from rental portfolio expansion, is anticipated to enhance stock sentiment and justify a higher valuation over time. Jeff Yau’s Buy recommendation comes with a target price of HK$28.10, reflecting a more optimistic outlook based on the company’s strategic land reserves and potential for earnings growth.
In another report released on March 21, Jefferies also reiterated a Buy rating on the stock with a HK$25.00 price target.
HLDVF’s price has also changed moderately for the past six months – from $2.590 to $3.060, which is a 18.15% increase.
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Henderson Land Development Co (HLDVF) Company Description:
Henderson Land Development Co. Ltd. is an investment holding company, which engages in the property development and investment, construction, infrastructure, hotel operation, finance, department store operation, and project management. It operates through the following business segments: Property Development; Property Leasing; Department Store Operation; Others Businesses; and Utility and Energy. The Property Development segment involves in the development and sale of properties. The Property Leasing segment offers leasing of properties. The Department Store Operation segment comprises of department store operations and management. The Other Businesses segment is comprised of hotel operation and management, construction, provision of finance, investment holding, project management, property management, agency services, cleaning and security guard services, as well as the trading of building materials and disposal of leasehold land. The Utility and Energy segment consists of production, distribution and marketing of gas, water supply, and energy businesses. The company was founded by Shau Kee Lee in 1976 and is headquartered in Hong Kong.
