The property market in Hong Kong was in a downward phase last year, and the performance of real estate properties last year showed no improvement. Real estate analysts believe that in this performance period, except for Swire Properties (1972.HK), which performed better, and Wharf (0004.HK), which was in line with expectations, almost all other real estate stocks performed worse than expected, mainly due to the overall increase in interest rates. The estimate is high, and the industry’s recognized revenue and gross profit margin from property sales last year were worse than market expectations, and the debt situation has not returned to normal. In the interim and full-year results announced this time, the dividend payment ability of real estate stocks is worse than expected, and it may not improve in the future. Fortunately, the overall debt risk is still controllable.
Dividend cuts are more severe than rent-collecting stocks
Analysts said that the dividend payout levels of most real estate stocks are different from expectations, especially developers who have reduced dividend payouts to a greater extent than rent-collecting stocks. SHKP (0016.HK) cut its interim interest rate by 24%, which was also worse than market expectations of a 10% to 15% decrease.
As for New World (0017.HK), its interim dividend has been slashed by more than 50%, which overall reflects poor property sales performance and damaged cash flow, which directly affects its ability to pay dividends. Henderson Land’s finances are still tight, but the full-year dividend remains unchanged, exceeding market expectations. The decline in rental income of rent-collecting stocks is not as bad as that of property sales, and the cash flow is better than that of developers.
Analysts continued that at this stage, we should not expect whether real estate stocks can regain their former dividend-paying ability in the future, because property prices have continued to fall in the past two years, property sales have gradually been recognized, and gross profit margins will still fall in the next two to three years. ” Once the dividend payment falls, it will be difficult to recover.”
Heavy debt in the New World has the greatest short-term pressure
Regarding the short-term debt problem, analysts pointed out that the most serious problem is New World. As of the end of last year, the amount of loans due within one year reached 61.98 billion yuan (an increase of 25.9% from last year). However, the amount of available bank loans has increased from 2021 to 2021. 56.6 billion yuan, gradually dropped to only 13 billion yuan at the end of last year (a decrease of 67% from the middle of last year), which is the greatest pressure among many developers; other developers are in normal condition, and all banks are willing to provide financing, even if Henderson Land seems to have a gearing ratio High, but shareholder loans have increased to 62.448 billion yuan to support it, and banks are not too worried about Henderson.
Asked about the industry’s overall debt maturity and refinancing risks, the analyst said that the overall situation is within control, and all the real estate stocks tracked by the analyst have banks willing to lend money. There are some dangers to worry about in the New World. Banks have tightened loan approvals for small real estate developers. The market is mainly concerned about the debt problems of small and unlisted companies. Banks’ lending intentions have improved after the government’s “removal of stimulus measures”, but they are still reducing cash rebates in an effort to control related risk exposures.
In addition, regarding whether real estate stocks have investment value at present, Ye Shangzhi, chief strategist of First Shanghai, said that the overall property market sentiment has not yet completely improved, and real estate stocks are still in the wait-and-see stage for the time being. He said that the current “retirement” period is not long, and the market needs to digest the owners’ selling orders first; although the property market is currently relatively active, the transaction performance is not bad, there are buyers to take over, and the good sales of the real estate developers will be beneficial to the return of funds and cash flow. There may be a slight improvement, but it still needs to be digested by the selling market. We will wait and see whether property prices can stabilize in the second half of the year and return to a normal and healthy state.
Interview and writing: Chen Yuanwei
2024-04-07 23:43:44
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