Damo: Changshi Group's (01113) capital return visibility is still limited and maintains a “in sync with the market” rating

The Zhitong Finance App learned that Morgan Stanley released a research report stating that it has updated the Changshi Group (01113) risk-return framework to include the company's performance for the first half of this year, and lowered the basic profit forecast of 2%, 5% and 3% for each year from 2026 to 2028, respectively, to reflect the bank's latest assumptions on rent renewal adjustments, occupancy rates and interest rates for retail and office buildings, as well as an updated development property entry and completion schedule. It lowered the basic profit forecast of Changshi Group by 2%, 5% and 3% for each year, respectively, and maintained the target price of HK$49 and HK$49 “In sync with the market” rating .

The bank maintained its 2026-2028 dividend payout forecast unchanged, and the payout ratio is expected to stabilize at 45% to 50%. The bank pointed out that the upward surprise may have come from strong sales at 21 Borough Road and Kai Tak in the second half of the year, but developing property sales is not a recurring source of revenue. Although the company has assets sold and is in a net cash position, the bank does not expect additional capital returns in the short term.