Goldman Sachs has released a research report indicating that Kerry Properties (00683) reported core earnings of HK$782 million in the first half, excluding losses from fair value changes on investment properties. This represents a 9% year-on-year decline, broadly aligning with both the bank's and market expectations.

The group declared an interim dividend of HK$0.4 per share, unchanged year-on-year, with a payout ratio equivalent to approximately 74% of core earnings per share. Based on a 70% discount to the forecast net asset value per share for 2026, the target price has been adjusted downward from HK$26 to HK$25, while maintaining a "Neutral" rating.

Despite the ongoing recovery in property prices, Hong Kong development property revenue fell 59% year-on-year during the period, although the EBIT margin rebounded to 15%. Benefiting from contributions from new integrated-use projects in Shanghai and Hangzhou, as well as RMB appreciation, mainland China investment property revenue rose 5% year-on-year.

Goldman Sachs has revised its core earnings forecasts for Kerry Properties for 2026 to 2028, with adjustments ranging from a 5% decrease to a 1% increase. The earnings per share forecasts have been updated from HK$1.4, HK$3.1, and HK$3.82 to HK$1.3, HK$3.05, and HK$3.84, respectively.