Full-Year Earnings Below Consensus, but Performance of Mainland Portfolio Very Encouraging

Hang Lung Properties announced 2020 full-year results with underlying earnings of HKD 4.2 billion or underlying EPS of HKD 0.93, down 6% year on year. Full year dividend totaled HKD 0.76 per share, flat from a year ago. The earnings were below consensus and our estimate by 5% and 7%, respectively. Market reaction was muted after the results announcement. We believe the market was satisfied with the growth of the mainland portfolio, along with in-line operating profit and steady dividend. We retain our fair value estimate of HKD 22, and our no-moat rating. The shares are currently fairly valued.