HK Property: 1H26 results preview: let the earnings rebound begin

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HK Property: 1H26 results preview: let the earnings rebound begin

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HK Property

1H26 results preview: let the earnings

rebound begin

Industry Overview

1H26 results preview: earnings recovery takes hold 15 July 2026

We expect HK prop sector to deliver a solid set of 1H26 results, driven by a strong Equity

recovery in DP margins, early rental earnings rebound, and FX tailwind from the RMB’s Hong Kong

6% YoY appreciation in 1H26 for those with Mainland exposure. Yet, beyond dividends, Real Estate/Property

investor focus is likely to center on the timing of a rebound in primary residential sales Karl Choi, CFA >>

following the slowdown since June and the outlook for US interest rates. We continue to Research Analyst

prefer landlords amid softer residential sales, with HKL (Central office rental growth) Merrill+852 3508Lynch3108(Hong Kong)

and Link (buyback resumption and potential asset disposals) remaining our top picks. For karl.choi@bofa.com

investors more constructive on a housing recovery, we favor HLD (strong earnings Fan Tso, CFA >>

Research Analyst

rebound). We maintain U/P on MTR (large capex pipeline) and NWD (high leverage). Merrill Lynch (Hong Kong)

+852 3508 2875

1H26 earnings: 8% growth on average; trim landlords’ PO fan.tso@bofa.com

Ex. NWD (net loss), we forecast average core profit growth of 8% for the upcoming

results. We expect Hysan (DP bookings), HLD (DP margin), CKH (energy), and SHKP (DP Please see Exhibit 7 for a list of

margin) to deliver the strongest earnings growth of 51%/16%/10%/8%, respectively. We abbreviations used

revise our target prices by -2% on average, with broad-based cuts for landlords

reflecting weaker Mainland consumption and the impact on tourist spending and

Mainland mall income.