STOCKS | Citi Expects Improved 1H Results for Hong Kong Developers, Focus on DPS and Guidance

Citi said it has a positive outlook for Hong Kong developers’ first-half results ahead of the reporting season, with attention on dividend per share and forward guidance, according to Ming Pao. The bank forecast a rebound in developers’ earnings, mainly driven by development operations. It expects development margins to recover to 13%-18%, improving from 3%-8% in the first half of 2025. Citi said recognized revenue should be supported by strong sales, including 20%-30% from completed units. It also noted positive renewal rent performance for mainland China retail properties, while rent declines in other regions are narrowing. The report added that lower debt levels should improve financing costs, although interest capitalization on new assets is expected to decrease.