Champion REIT Still Resilient Despite Challenging Conditions

After a recent call with management, we maintain our fair value estimate for narrow-moat Champion REIT at HKD 4.75 per unit. The unit price has generally improved in line with a more positive outlook on the COVID-19 situation. However, a sharp increase in COVID-19 cases in recent days may see Champion’s unit price weaken as sentiment deteriorates. We think that this may present a buying opportunity, as we assume the risk of deviation to our base case view to be low. Our thesis on the REIT is unchanged and we remain positive on the long-term outlook for both of Champion’s properties.