Swire Properties (1972): Hitting its stride

研报英文原文证据摘录

J P M O R G A N

Asia Pacific Equity Research

08 August 2026

Swire Properties (1972)

Hitting its stride

Overweight

1972.HK, 1972 HK

Price (07 Aug 26):HK$23.38

Price Target (Jun-27):HK$30.00

The 1H26 results show that Swire is on the right track across all its major segments

(even HK office is better than feared). We forecast continued >30% Y/Y earnings

growth in FY26 due to DP delivery. Although DP delivery should normalize in

FY27 onwards, we still expect single-digit % Y/Y growth in FY27/28. We forecast

attributable gross rental income to achieve a mid-single-digit % CAGR from FY25

to FY28, driven by a >10% CAGR in Mainland China retail (positive rental

reversion & new malls) but offset by a low-single-digit % decline in HK office.

Notably, the attributable completed GFA should grow from 10.6mn sf in FY25 to

19.3mn sf in FY28 onwards, providing a good buffer for earnings growth. Swire

Properties remains one of our top picks for its visible earnings growth (13%

CAGR from FY25 to FY28), and excellent track record in delivering mid-singledigit % growth in dividends. Value-accretive capital recycling could also offer

upside risk. Valuations remain undemanding at a 52% discount to NAV & 5.2%

dividend yield.

Mainland China Retail (40% of rental income)- Good momentum & will

remain the growth driver: Tenant sales improved 23% Y/Y in 1H26, mostly

due to strong growth at Taikoo Hui Shanghai (+82% Y/Y; due to the opening

of The Louis in June 2025) and Taikoo Li Sanlitun Beijing (+63% Y/Y; due to

the opening of four flagship stores in the North Zone). However, even

excluding these 2 malls, tenant sales grew 10% Y/Y on average (outperforming

the broader market which only grew 1% Y/Y). The base will get higher in

2H26 (especially for Taikoo Hui Shanghai), but we still expect >10% Y/Y

growth (overall) and high-single-digit % growth (excluding outliers). With

solid tenant sales & positive rental reversion, attributable gross rental

income grew 14% Y/Y in 1H26, and we expect continued >10% Y/Y

growth in 2H26. Mainland China retail will remain Swire’s growth driver with

its rich mall opening pipeline. Projects scheduled for completion in 2H26

…