On Friday, Swire Properties (1972:HK) (OTC: SWPFF) received an upgrade from a Hold to a Buy rating by investment firm Jefferies, with a revised price target set at HK$18.00, an increase from the previous target of HK$14.00. The upgrade reflects a positive outlook on the company's prospects, particularly in light of its shareholder return policy and its expansion plans in China.
The analyst from Jefferies highlighted Swire Properties' proactive approach to shareholder returns, noting a recent HK$1.5 billion buyback that complements a progressively growing yield, currently at 7%. This strategy, along with the company's consistent track record of strong execution, has been a basis for the firm's positive rating.
Previously, concerns about the challenging office market and retail sector headwinds in China had led to a downgrade to Hold late last year. However, the current upgrade is supported by signs of improving consumer sentiment, which is expected to benefit Swire's retail operations.
Swire Properties is actively expanding its mall presence in China, with new openings anticipated in several major cities, including Hainan, Xi'an, Guangzhou, and Shanghai. The investment firm believes that these expansions, alongside the improving consumer climate, will be advantageous for the company's growth.
The increase in Swire Properties' price target to HK$18.00 from HK$14.00 by Jefferies suggests confidence in the company's ability to navigate through market challenges and capitalize on emerging opportunities within the Chinese market.
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