UBS has issued a research report assigning a HK$9.60 price target and a "Neutral" rating to HANG LUNG PPT (HKEX: 00101).

The report cites the company's statement that year-on-year tenant sales growth slowed to 15% in April 2026, down from 24% in Q1 FY2026, primarily due to soft performance in jewelry and some luxury brands.

Despite this, management noted that the overall momentum at flagship shopping malls remains strong and stable, even excluding gold-related business. The company emphasized a high correlation between tenant sales and rental income.

However, persistent negative rental growth in Wuhan and Shenyang continues to impact overall rental income. The initial occupancy rate for Hang Lung's new Westlake 66 shopping center in Hangzhou has reached 70%.

The company expects the project to achieve a 91% committed occupancy rate by Q3 2026 and anticipates generating positive operating cash flow next year after paying pre-opening expenses in 2026. One of the five office towers at Westlake 66 has been fully leased to a tenant in the education sector.

Looking ahead, the exclusive pavilion expansion at Westlake 66 is scheduled to open in Q4 2026, with management expecting it to contribute to earnings immediately.

In Hong Kong, Hang Lung Properties indicated that its office and retail property portfolios have remained stable so far this year. Renewal rents for its retail properties continue to see slight declines, but early signs of stabilization have emerged.

For office space, the company reported slight growth. Rents for its serviced apartments continue to rise, helping to offset the overall decline in total rental income.

Looking forward, the company plans to accelerate the sale of its residential assets in Hong Kong.