＜Research＞Jefferies: Not All HK Developers Expected to Reach Interest Expense Peak; Sector Top Pick SHKP

　　According to a research report by Jefferies, investors are advised to be cautious in their stock selection as not all property developers are expected to see a peak in their interest expenses, taking into account their future capital expenditures, interest capitalisation and refinancing of fixed debt. Within the sector, the broker's top pick is SHK PPT (00016.HK) +0.550 (+0.787%) Short selling $97.49M; Ratio 31.476% , which has a flexible profit profile relative to its peers and a well-managed balance sheet.

　　Jefferies cited lower interest rates as a positive catalyst for the industry. However, the broker believed that the market recovery would take time and the improvement in corporate fundamentals may be uneven. Companies with larger scale of completion, higher fixed interest rates or increasing capital expenditure may find it difficult to see significant interest savings on their income statements. Companies believed to be involved in these situations include NEW WORLD DEV (00017.HK) +0.060 (+0.825%) Short selling $5.40M; Ratio 28.514% , HENDERSON LAND (00012.HK) +0.250 (+1.126%) Short selling $10.91M; Ratio 27.530% , HANG LUNG PPT (00101.HK) +0.040 (+0.631%) Short selling $8.10M; Ratio 18.564% , and HYSAN DEV (00014.HK) +0.040 (+0.366%) Short selling $1.50M; Ratio 25.178% .

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　　For residential property prices, Jefferies continued to expect a mid-single-digit decline this year, with a single-digit recovery supported by interest rate cuts next year. Unless the labour market deteriorates significantly, Hong Kong remains a relatively stable housing market under the base case scenario.

　　(HK stocks quote is delayed for at least 15 mins.Short Selling Data as at 2024-07-26 16:25.)

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