UBS issued a research report stating that with Hong Kong retail sales stabilizing recently, WHARF REIC (01997) shares have gained 13% year-to-date. UBS believes that driven by declining HIBOR, the market has already priced in the recent retail sales stability and earnings recovery (expected at 2% to 9% from 2025 to 2026). However, long-term headwinds persist, primarily from the rebound in outbound travel by Hong Kong residents, more convenient mainland tax refund arrangements, and intensified competition among high-end shopping malls. Therefore, the firm maintains a "Neutral" rating on the stock while raising its target price to HK$23.

UBS stated that despite the retail sales rebound, it expects the trend to be temporary as local discretionary spending will face pressure following the National Day Golden Week holiday. In the long term, UBS believes there are structural headwinds from the expanded pilot tax refund scheme at land border control points (including Hong Kong residents) and intensified competition from mainland e-commerce platforms.

Based on HIBOR assumptions, UBS raised its earnings per share forecasts for WHARF REIC for 2025-2027 by 4% to 8% respectively. The firm believes Hong Kong retail sales are unlikely to record strong growth in the next two years, maintaining a cautious stance and forecasting retail sales to remain largely flat over the next two years.