A report from Morgan Stanley indicates that SINO LAND's (00083) financial performance for the first half of the fiscal year 2026 aligned with expectations. The company's underlying profit for the period was largely stable year-on-year at HKD 2.22 billion. However, due to an expanded share base, underlying earnings per share decreased by 6.3% to HKD 0.24 compared to the previous year. The interim dividend was maintained at HKD 0.15 per share. The brokerage anticipates that the scrip dividend option may be discontinued in the near term and expects the company could announce a share buyback program and a dividend increase alongside its full-year results. Morgan Stanley currently assigns SINO LAND a "Market Weight" rating with a target price of HKD 10.6.

As of the end of December last year, the company's net cash position increased by HKD 1.9 billion from the first half to HKD 51.4 billion, primarily benefiting from increased receipts from property sales. Interest income, however, fell by 14% year-on-year, affected by the decline in Hong Kong Interbank Offered Rates. With rebounding property prices and sustained strong momentum in the physical market, attributable sales for the first half of fiscal 2026 reached HKD 6.4 billion, and contract sales recorded so far in 2026 amount to HKD 1.5 billion.

The report suggests that profit margins for Hong Kong residential property development may have reached their lowest point. Based on an unbooked sales value of HKD 4.6 billion and the expectation of higher margins from land acquired after 2023, the brokerage estimates that future development margins could reach a high single-digit percentage.