DBS: Sun Hung Kai Properties (00016) benefits from the continued recovery of the property market and a recovery in property development profit margins

The Zhitong Finance App learned that DBS released a research report stating that Sun Hung Kai Properties (00016) will benefit from the continued recovery of the Hong Kong residential property market. As the largest real estate developer in Hong Kong, the company has about 19.1 million square feet of development land and huge agricultural land reserves, which can benefit from the accelerated development of the northern metropolitan area. Meanwhile, its high-quality investment property portfolio continues to generate steady recurring income. DBS's target price for SHKP is HK$146.3, maintaining a “buy” rating. The bank pointed out that as housing prices in Hong Kong continue to recover, the profitability of SHKP's development business is gradually improving. The bank expects that as high-margin projects are confirmed one after another, the overall pre-tax development margin for its Hong Kong project will rise from 8% in the first half of FY2026 and about 12% for the whole year to more than 20% in the 2027 and 2028 fiscal years.