UBS released a research report stating that SHK PPT (00016) recorded core profit of HK$21.9 billion for fiscal year 2025, representing a 1% year-on-year increase, which broadly met the bank's expectations. However, Hong Kong property development profit margins declined significantly to 12% in FY2025, down from 26% in the previous year, and UBS expects the stock price to react slightly negatively to this disappointing margin performance.

UBS maintains its target price for SHK PPT at HK$96, based on a 50% discount to net asset value of HK$189 per share, and has slightly lowered its earnings forecasts for FY2026-2027 by 1% to 4% to reflect the latest property development pre-sales situation. The rating remains "Buy".

The bank noted that SHK PPT's Hong Kong rental income continues to be weak, while mainland retail shows signs of improvement. In the second half of FY2025 (January to June 2025), SHK PPT's attributable total rental income in Hong Kong declined 3% year-on-year, with office rental income down 5% and retail rental income down 3%. Management indicated that rental adjustments remain negative, with retail in low single digits and office in high single digits.

Mainland rental income also fell 3% year-on-year, with both office and retail segments declining 2% to 3%. However, since June, mainland tenant sales have shown strong recovery momentum, benefiting from the opening of prime retail spaces and luxury tenant expansions at Shanghai IFC mall.