Morgan Stanley has released a research report adjusting its forecasts for HYSAN DEV (00014), raising the 2026 underlying earnings per share estimate by 6% while cutting 2027 and 2028 projections by 2% and 9% respectively. This revision reflects stronger-than-expected retail and office performance, higher interest expenses due to reduced capitalized interest in fiscal years 2027-2028, and updated leasing and occupancy assumptions.

The investment bank has lowered its target price for HYSAN DEV from HK$21 to HK$19, while maintaining a "Market Perform" rating. Morgan Stanley anticipates that the company's dividends will remain stable at HK$1.08 per share between 2026 and 2028.

The report notes that HYSAN DEV's net debt ratio remains elevated compared to peers, and after accounting for capital expenditure on Lee Garden Eight and perpetual bond distributions, near-term cash earnings are insufficient to cover dividend payouts. Additionally, the bank believes that Lee Garden Eight may require a longer period before it generates meaningful rental income contributions.