Bank of America Securities released a research report stating that LINK REIT's (00823) interim results for the first half of fiscal year 2026 (ending September) fell short of expectations. The bank lowered its distribution per unit (DPU) forecast for fiscal years 2026 to 2028 by 2% to 3%, consequently reducing the target price from HK$45 to HK$43. The firm believes LINK REIT's current valuation remains attractive and reiterated a "Buy" rating.

The report highlighted that the most significant negative factor for LINK REIT was the sharp decline in retail rental income from mainland China. However, the 6% drop in Hong Kong renewal rents was within expectations. The market was disappointed by the widened year-on-year decline in tenant sales during the second fiscal quarter.

Bank of America Securities expects LINK REIT's cost-saving measures, particularly in labor expenses, to help stabilize DPU until the first half of fiscal 2027. The company should also be able to adjust its business portfolio to better compete with e-commerce.