Bank of America Securities released a report indicating that WHARF HOLDINGS (00004) is expected to see an increase in luxury property profits this year, supported by several new projects. These include the Lung Cheung Road project, 1 Plantation Road on The Peak, and serviced residences at Chengdu IFS, with more new projects set to launch over the next two to three years. The bank forecasts a 19% year-on-year rise in core net profit for the current year, leading to an upward revision of its net asset value (NAV) per share estimate. Consequently, the target price has been raised by 4% from HK$28 to HK$29. The current share price represents a significant 64% discount to NAV, suggesting valuations are not high. However, a target dividend payout ratio in the lower 30% range is expected to result in a dividend yield of only 2% this year, prompting the maintenance of a "Neutral" rating.

The report noted that WHARF HOLDINGS reported core profit of HK$4.1 billion, a 47% increase year-on-year and 12% above expectations, primarily due to a narrowing of impairments on development properties. The company recorded a surplus of HK$10 billion from its listed equity investment portfolio and divested HK$9.7 billion of investments in the 2025 fiscal year, followed by an additional HK$2 billion sold in the first two months of 2026. As a result, its financial position shifted from a net debt of HK$6.5 billion at the end of June to a net cash position of HK$2.0 billion by the end of December. Book value per share increased by 2% half-on-half to HK$48.01. The bank has revised its earnings per share forecasts for the 2026 to 2028 fiscal years, mainly reflecting changes in the timing of revenue recognition from development properties.

The report added that rental income declined by 3% last year, with EBIT down 4%, but sales from mainland Chinese tenants rebounded in the first two months of this year. Management has guided for flat rental income growth for the current year.