A report from Goldman Sachs states that SINO LAND's (00083) performance for the first half of fiscal year 2026 met expectations. Its underlying profit remained largely flat year-on-year at HK$2.2 billion, primarily impacted by exchange losses on US dollar deposits. After including contributions from associates and joint ventures, the group's profit before tax increased by 17% year-on-year to HK$2.4 billion, mainly driven by increased revenue recognition from development properties.

Based on the latest results, Goldman Sachs has raised its earnings per share forecasts for SINO LAND for fiscal years 2026 to 2028 by 8%, 1%, and 1% respectively. The target price has been increased from HK$14.6 to HK$15.2, with a reiterated "Buy" rating.

During the period, the profit margin for development properties remained low at 7.2%, reflecting the higher land costs acquired in earlier years. Management has expressed a more positive outlook on market prospects, indicating an improvement in Hong Kong's property market sentiment since the end of 2025, which supports gradual price increases for new projects. The group recorded HK$6.4 billion in contracted sales for the first half of the fiscal year, with an additional HK$1.5 billion recorded since then. A further HK$6.1 billion in sales has yet to be recognized, with two new projects scheduled for launch in the coming months.

Goldman Sachs anticipates that SINO LAND's profit margin for development properties will gradually improve from 10% in fiscal 2026 to 21% by fiscal 2028. Tenant sales in its shopping malls are also expected to recover. While negative rental growth for office space renewals may persist, opportunities are seen in areas such as co-working spaces and demand from small and medium-sized enterprises.