Listed Real Estate Asia, KT Capital Group

Jacob Cheng

Listed Real Estate Asia

KT Capital Group

Principal investments and advisory firm that focuses on connecting the CIS countries with East Asia.

Principal investments and advisory firm

Equity Bottom-Up

Wharf Real Estate Investment C / Equity Bottom-Up

<ul>
<li>Wharf REIC reported 2% yoy core earnings growth, the first earnings increase since 2019. The results also show Hong Kong retail business is more resilient than expected</li>
<li>The upcoming catalysts include 1) lower interest rates, 2) weakening currency environment and 3) bottoming out of HK retail market</li>
<li>Market is forward-looking and we think the worst is behind us.  Valuation is very compelling.  The stock is a beta play.  BUY</li>
</ul>


Wharf REIC reported 2% yoy core earnings growth, the first earnings increase since 2019. The results also show Hong Kong retail business is more resilient than expected
The upcoming catalysts include 1) lower interest rates, 2) weakening currency environment and 3) bottoming out of HK retail market
Market is forward-looking and we think the worst is behind us.  Valuation is very compelling.  The stock is a beta play.  BUY


Wharf REIC: Beta Play W Multiple Catalysts, Lower Rates, Weaker Currency and Returning of Shoppers

Thematic (Sector/Industry)

<ul>
<li>Jackson Hole is annual event among central bankers and economists, where Fed Chair Powell will also be speaking on Friday</li>
<li>In the scenario of a new Fed rate cut cycle, we expect Hong Kong RE, China RE and Singapore RE to benefit, while investors can reduce exposure in Japan RE</li>
<li>We also recommend some trade ideas based on our analysis and suggest specific stocks</li>
</ul>


Jackson Hole is annual event among central bankers and economists, where Fed Chair Powell will also be speaking on Friday
In the scenario of a new Fed rate cut cycle, we expect Hong Kong RE, China RE and Singapore RE to benefit, while investors can reduce exposure in Japan RE
We also recommend some trade ideas based on our analysis and suggest specific stocks


A Scenario Analysis: If Fed Initiates a Rate Cut Cycle, How Should Investors Position Themselves?

Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>RTHK just reporting that HK Finance Secretary Paul Chan has said in his budget speech that HK will remove all property cooling measures in place, with immediate effect. </li>
<li>That would be That is Special Stamp Duty, Buyer's Stamp Duty, New Residential Stamp Duty. "Measures no longer necessary given the current economic and market conditions."</li>
<li>This should cause people to get excited short-term about property developers.</li>
</ul>


RTHK just reporting that HK Finance Secretary Paul Chan has said in his budget speech that HK will remove all property cooling measures in place, with immediate effect. 
That would be That is Special Stamp Duty, Buyer's Stamp Duty, New Residential Stamp Duty. "Measures no longer necessary given the current economic and market conditions."
This should cause people to get excited short-term about property developers.


Hong Kong To Scrap All "Spicy Measures" (Property Cooling Measures)

<ul>
<li>The <a href="https://www.smartkarma.com/entities/link-reit" target="_blank" data-smartkarma-citation="entities:872:1" rel="noopener">Link REIT (823 HK)</a> rights offering caused some upset amongst investors. They got dilution where they did not need it, and de-leveraging from a REIT wanting to invest.</li>
<li>The units fell in price, then fell some more. Then the rights started trading.</li>
<li>Last week in <a href="https://www.smartkarma.com/insights/link-reit-823-nil-paid-rights-start-trading-tomorrow-the-trades" target="_blank" data-smartkarma-citation="insights:97326" rel="noopener">Link REIT (823) - Nil Paid Rights Start Trading Tomorrow - The Trades</a> I said strategy was to be long by Tuesday or Wednesday. It's Wednesday.</li>
</ul>


The Link REIT (823 HK) rights offering caused some upset amongst investors. They got dilution where they did not need it, and de-leveraging from a REIT wanting to invest.
The units fell in price, then fell some more. Then the rights started trading.
Last week in Link REIT (823) - Nil Paid Rights Start Trading Tomorrow - The Trades I said strategy was to be long by Tuesday or Wednesday. It's Wednesday.


Link REIT (823) - Anchors Aweigh! Fair Weather Sailing Ahead

David Blennerhassett

<ul>
<li>China's swift and sudden abolishment of its Covid rules triggered across-the-board outperformance for Hong Kong stocks. The HSI is up ~13% since early December 2022. </li>
<li>A strong rebound of inbound tourism and the resumption of normalised travel between Hong Kong and the mainland should underpin the city's recovery.</li>
<li>The retail sector, notably the high street shop segment, should lead this post-Covid recovery in terms of both rents and prices. </li>
</ul>


China's swift and sudden abolishment of its Covid rules triggered across-the-board outperformance for Hong Kong stocks. The HSI is up ~13% since early December 2022. 
A strong rebound of inbound tourism and the resumption of normalised travel between Hong Kong and the mainland should underpin the city's recovery.
The retail sector, notably the high street shop segment, should lead this post-Covid recovery in terms of both rents and prices. 


Hong Kong Property: Retail Reopening Front-Runners

Hong Kong

Wharf Real Estate Investment Company Limited provides real estate investment services. The Company develops, invests, and operates residential and commercial properties. Wharf Real Estate Investment operates business in Hong Kong.

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Wharf Real Estate Investment C (1997 HK)

Wharf REIC: Beta Play W Multiple Catalysts, Lower Rates, Weaker Currency and Returning of Shoppers

Wharf REIC reported its earnings which is better than expected. The stock is a beta play and we view multiple catalysts ahead: lower interest...

Jacob Cheng

A Scenario Analysis: If Fed Initiates a Rate Cut Cycle, How Should Investors Position Themselves?

We conducted a scenario analysis on Asia real estate if Fed is to initiate a new rate cut cycle. Within Asia, we expect Hong Kong, China and...

Jacob Cheng

Hong Kong To Scrap All "Spicy Measures" (Property Cooling Measures)

HK Finance Secretary has introduced the 2024-2025 Budget. All "spicy measures" (property cooling measures) are now lifted. This should push the...

Travis Lundy

Link REIT (823) - Anchors Aweigh! Fair Weather Sailing Ahead

LINK REIT Rights trading ends soon. That's an end to obvious overhang. There may be a bit more when units are delivered in a few weeks. In the...

Travis Lundy

Hong Kong Property: Retail Reopening Front-Runners

HKL is cheap at a forward P/B of 0.32x. Both Link and Wharf will benefit from the HK/China border fully opening. But Wharf REIC's two premier...

David Blennerhassett

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