LONGFOR GROUP (00960) shares experienced a significant rise of over 5% during afternoon trading. At the time of writing, the stock was up 5%, trading at HK$8.61 with a turnover of HK$138 million.

The catalyst for the move appears to be positive news regarding the company's debt management. LONGFOR GROUP recently prepaid the principal and interest on a RMB 1.5 billion corporate bond. Following this, its remaining onshore credit bond balance stands at approximately RMB 1.8 billion, with only RMB 1 billion of that maturing in 2026. Company management anticipates that all onshore corporate bonds and medium-term notes will be fully repaid by the end of 2026 or January 2027.

In a recent research note, Morgan Stanley commented that LONGFOR GROUP's deleveraging progress is back on track. The report also noted that while the company's proactive strategy to reduce inventory may lead to deeper losses in its property development business this year, this move is expected to reduce balance sheet risk and lessen the drag on earnings per share over the medium term.

The investment bank further stated that the improvement in rental performance from LONGFOR GROUP's shopping malls, coupled with the ongoing deleveraging, is encouraging. Morgan Stanley views the current valuation as reasonable, suggesting that future upside for the share price will depend on a recovery in pre-sales performance.