The combination of Hongkong Land's new share buyback programme and a partial disposal of One Exchange Square (OES) in Hong Kong - both announced last week - is accretive to both net asset value (NAV) and earnings per share (EPS), say CGS International Research analysts Will Chu, Raymond Cheng and Steven Mak.
Despite the "slightly positive impact", the CGSI analysts are keeping "hold" on Hongkong Land with a higher target price of US$4.91 ($6.46) from US$4.82 previously. While they welcome the "value-unlocking activity", they think the continued decline in office rents in Hong Kong "hinders its re-rating in the next 12 months".
In an April 25 note, the CGSI analysts call it an opportunistic disposal; Hongkong Land's management has stated that the market "should not expect similar disposals of Hong Kong assets in the near future".
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