Morgan Stanley has released a research report upgrading HANG LUNG PPT (00101) to an "Overweight" rating, raising the target price from HK$6.5 to HK$9.

The investment bank believes that in the short term, tenant sales at the group's mainland shopping malls showed improvement in July and August, compared to a 4% year-on-year decline in the first half of the year. Notably, sales at Shanghai Plaza 66 turned from a 4% decline in the second quarter to flat performance.

From a long-term perspective, the bank expects the group to benefit from sustained growth in inbound tourism, including consumption demand recovery driven by tax refund policies. Regarding new projects, the retail portion of Hangzhou Westlake 66 has achieved an 81% pre-leasing rate and is expected to open in 2026. The group has additionally leased 452,000 square feet of space to expand the mall's street frontage.

Potential residential unit sales could generate over HK$10 billion in revenue, reducing the debt ratio by more than 5 percentage points. The group currently offers a dividend yield of 6.5%, which is higher than peers. The bank expects share dilution from scrip dividends to cease after the full-year 2025 results announcement.