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Swire Properties Ltd 01972

Morningstar Rating
HKD 14.42 −0.26 (1.77%)
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Company Report

Swire Properties: Near-Term Weakness Across Office and Retail Assets; Share Price Pressure Remains

Narrow-moat Swire Properties’ first-quarter operating performance was within our expectations, with continued weakness across its office and retail assets. Its Hong Kong offices generally registered a decline in headline rents compared with the fourth quarter of 2023, in line with the overall Grade A office market. The Pacific Place and Taikoo Place offices reported negative rental reversions of 17% and 13%, respectively, as leases are renewed at a lower market rate compared with the previous lease cycle. That said, we retain our view that Swire’s high-quality core office assets will remain resilient compared with peers, as end-March 2024 portfolio occupancy of 89% is unchanged from end-2023. Individual office occupancies—except Two Taikoo Place, which opened during the current downturn—also outperformed the respective submarket.

Price vs Fair Value

01972 is trading within a range we consider fairly valued.
Price
HKD 14.68
Fair Value
HKD 26.10
Uncertainty
Medium
1-Star Price
HKD 91.84
5-Star Price
HKD 92.99
Economic Moat
Gnkly
Capital Allocation
Dntgzlcf

Bulls Say, Bears Say

Bulls

Rental rates in Pacific Place and Taikoo Place offices will recover faster as their location continues to attract tenants.

Bears

Hong Kong will not recover its international financial status, leading to weaker demand for office property by multinational companies.

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Trading Information

Previous Close Price
HKD 14.68
Day Range
HKD 14.3614.84
52-Week Range
HKD 13.9820.45
Bid/Ask
HKD 14.40 / HKD 14.42
Market Cap
HKD 84.36 Bil
Volume/Avg
4.4 Mil / 3.9 Mil

Key Statistics

Price/Earnings (Normalized)
10.97
Price/Sales
5.75
Dividend Yield (Trailing)
7.28%
Dividend Yield (Forward)
7.28%
Total Yield
7.28%

Company Profile

Swire Properties is a Hong Kong-based property investor, and Hong Kong's largest office landlord. Its Hong Kong portfolio provides more than 13 million square feet of gross floor area, with its portfolio of Grade A office contributing over 9 million square feet. The firm also holds investment properties and development projects in China, the United States and Southeast Asia. Rental income accounts for over 60% of its total revenue, with property development and hotel operations contributing the balance. The company was listed in 2012. Parent company Swire Pacific holds an 82% stake.
Sector
Real Estate
Industry
Real Estate Services
Stock Style Box
Large Value
Total Number of Employees
6,000

Competitors

Valuation

Metric
01972
H78
01997
Price/Earnings (Normalized)
10.9710.0812.57
Price/Book Value
0.300.230.40
Price/Sales
5.754.025.82
Price/Cash Flow
12.6517.5511.65
Price/Earnings
01972
H78
01997

Financial Strength

Metric
01972
H78
01997
Quick Ratio
0.480.610.16
Current Ratio
1.031.700.24
Interest Coverage
7.92−1.163.54
Quick Ratio
01972
H78
01997

Profitability

Metric
01972
H78
01997
Return on Assets (Normalized)
2.11%1.87%2.41%
Return on Equity (Normalized)
2.54%2.39%3.15%
Return on Invested Capital (Normalized)
2.33%2.39%3.30%
Return on Assets
01972
H78
01997
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