Listed Real Estate Asia, KT Capital Group

Jacob Cheng

Listed Real Estate Asia

KT Capital Group

Principal investments and advisory firm that focuses on connecting the CIS countries with East Asia.

Principal investments and advisory firm

Equity Bottom-Up

<ul>
<li>Hysan faces a fatal 2026 earnings cliff. When Lee Gardens Phase 8 completes, 0.69 bn HK dollars of masked capitalised interest will instantly crush the income statement.</li>
<li>A 15.5% office vacancy rate and a 0.6 m sq ft annual supply glut ensure Hysan's 1 m sq ft of new space faces catastrophic leasing headwinds.</li>
<li>Plunging luxury retail sales and mainland China's deceleration have structurally impaired Hysan's Causeway Bay stronghold, stripping away its traditional defence mechanism against office market weakness.</li>
</ul>


Hysan faces a fatal 2026 earnings cliff. When Lee Gardens Phase 8 completes, 0.69 bn HK dollars of masked capitalised interest will instantly crush the income statement.
A 15.5% office vacancy rate and a 0.6 m sq ft annual supply glut ensure Hysan's 1 m sq ft of new space faces catastrophic leasing headwinds.
Plunging luxury retail sales and mainland China's deceleration have structurally impaired Hysan's Causeway Bay stronghold, stripping away its traditional defence mechanism against office market weakness.


Short Hysan (14 HK): The 2026 Earnings Cliff and Causeway Bay's Perfect Storm

HK/China Equity Long-Short

Osbert Tang, CFA

Thematic (Sector/Industry)

<ul>
<li>There is an increasing likelihood that the duty-free quota of mainland tourists visiting Hong Kong will rise to Rmb30,000 from Rmb5,000. This will benefit many retail-related sectors.</li>
<li>
<a href="https://www.smartkarma.com/entities/luk-fook-holdings-intl-ltd" target="_blank" data-smartkarma-citation="entities:19054:1" rel="noopener">Luk Fook Holdings (590 HK)</a> is the best play among jewellery retailers given it has 65% of revenue from Hong Kong. <a href="https://www.smartkarma.com/entities/sa-sa-international-hldgs" target="_blank" data-smartkarma-citation="entities:20143:1" rel="noopener">Sa Sa International (178 HK)</a> is the cosmetics play.</li>
<li>Property investors including <a href="https://www.smartkarma.com/entities/wharf-holdings-ltd" target="_blank" data-smartkarma-citation="entities:51:1" rel="noopener">Wharf Holdings (4 HK)</a> and <a href="https://www.smartkarma.com/entities/hysan-development-co" target="_blank" data-smartkarma-citation="entities:14169:1" rel="noopener">Hysan Development Co (14 HK)</a> will gain from the shopping malls in major tourist areas in Hong Kong.</li>
</ul>


There is an increasing likelihood that the duty-free quota of mainland tourists visiting Hong Kong will rise to Rmb30,000 from Rmb5,000. This will benefit many retail-related sectors.

Luk Fook Holdings (590 HK) is the best play among jewellery retailers given it has 65% of revenue from Hong Kong. Sa Sa International (178 HK) is the cosmetics play.
Property investors including Wharf Holdings (4 HK) and Hysan Development Co (14 HK) will gain from the shopping malls in major tourist areas in Hong Kong.


Increasing HK Duty Free Quota: The Beneficaries

IPOs and Catalysts/Events, Global Equity Research Ltd

Arun George

IPOs and Catalysts/Events

Uncompromised, Independent, Conflict-Free Research

Global Equity Research Ltd

Global Equity Research was started in 2017 by a group of experienced research professionals. It was founded on a passionate belief in the importance and the need for uncompromised, independent, conflict-free research. We aim to provide differentiated and actionable primary and bottom up fundamental research.

Event-Driven

<ul>
<li>
<a href="https://www.smartkarma.com/entities/soundwill-holdings-ltd" target="_blank" data-smartkarma-citation="entities:19318:1" rel="noopener">Soundwill Holdings (878 HK)</a> announced a privatisation offer from the Foo Family, the largest shareholder, at HK$8.50 (HK$7.50 cash + HK$1.00 special dividend), a 62.8% premium to the undisturbed price.</li>
<li>Key conditions include approval by at least 75% of independent shareholders (&lt;10% of independent shareholders rejection) and a headcount test. No disinterested shareholder holds a blocking stake.</li>
<li>While the offer is light compared to peer multiples, it is attractive compared to historical trading ranges. A low AGM minority participation rate facilitates the vote. </li>
</ul>



Soundwill Holdings (878 HK) announced a privatisation offer from the Foo Family, the largest shareholder, at HK$8.50 (HK$7.50 cash + HK$1.00 special dividend), a 62.8% premium to the undisturbed price.
Key conditions include approval by at least 75% of independent shareholders (&lt;10% of independent shareholders rejection) and a headcount test. No disinterested shareholder holds a blocking stake.
While the offer is light compared to peer multiples, it is attractive compared to historical trading ranges. A low AGM minority participation rate facilitates the vote. 


Soundwill Holdings (878 HK): Foo Family’s Offer at HK$8.50

Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

<ul>
<li>When property advisors (JLL, Knight Frank, CBRE etc) debate the bottom of Hong Kong's office/retail market, such commentary is often infused with cautious optimism. </li>
<li>And for good reason, as vacancies increase, and rents soften.</li>
<li>Recent press articles and anecdotal evidence suggests market uncertainty lingers, prompting  landlords to (further) assess their stance on rents.</li>
</ul>


When property advisors (JLL, Knight Frank, CBRE etc) debate the bottom of Hong Kong's office/retail market, such commentary is often infused with cautious optimism. 
And for good reason, as vacancies increase, and rents soften.
Recent press articles and anecdotal evidence suggests market uncertainty lingers, prompting  landlords to (further) assess their stance on rents.


Hong Kong Property: In Need Of A Good Story

<ul>
<li>
<a href="https://skr.ma/SRsXc" target="_blank" rel="noopener">StubWorld: GMO Internet (4784) Remains An Avoid. Get Involved With GMO Internet Group (9449 JP)</a> flagged <a href="https://www.smartkarma.com/entities/hang-lung-group-ltd" target="_blank" data-smartkarma-citation="entities:50:1" rel="noopener">Hang Lung (10 HK)</a> as coming up "expensive" to <a href="https://www.smartkarma.com/entities/hang-lung-properties-ltd" target="_blank" data-smartkarma-citation="entities:49:1" rel="noopener">Hang Lung Properties (101 HK)</a>.</li>
<li>Back in January 2024 HLP offered a scrip dividend option, and HLG has taken full advantage, increasing its stake by 4%.</li>
<li>As HLG adds more HLP, long-term deep value play Dodge &amp; Cox gradually sells HLG. That makes things interesting. And HLG's P/B is inexpensive.</li>
</ul>



StubWorld: GMO Internet (4784) Remains An Avoid. Get Involved With GMO Internet Group (9449 JP) flagged Hang Lung (10 HK) as coming up "expensive" to Hang Lung Properties (101 HK).
Back in January 2024 HLP offered a scrip dividend option, and HLG has taken full advantage, increasing its stake by 4%.
As HLG adds more HLP, long-term deep value play Dodge &amp; Cox gradually sells HLG. That makes things interesting. And HLG's P/B is inexpensive.


Hang Lung (10 HK) Is Inexpensive As Dodge & Cox Sells (A Little)

Hong Kong

Hysan Development is a Hong Kong-based property investment, management, and development company. It primarily owns, develops, and manages commercial real estate, including shopping malls, office buildings, and luxury residential properties, with a significant portfolio concentrated in Causeway Bay. The company was founded in 1923 and is headquartered in Hong Kong.

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Hysan Development (14 HK)

Short Hysan (14 HK): The 2026 Earnings Cliff and Causeway Bay's Perfect Storm

Plunging luxury retail sales and mainland China's deceleration structurally impaired Hysan's Causeway Bay stronghold, stripping away its...

Jacob Cheng

Increasing HK Duty Free Quota: The Beneficaries

Potential increase in duty-free quota for mainland visitors to Hong Kong to benefit retail sectors, with Luk Fook as the top jewellery play, Sa Sa...

Osbert Tang, CFA

Soundwill Holdings (878 HK): Foo Family’s Offer at HK$8.50

While the offer is light compared to peer multiples, it is attractive compared to historical trading ranges. A low AGM minority participation rate...

Arun George

Hong Kong Property: In Need Of A Good Story

Upgrading and flight-to-quality in the office space has the affect of lifting occupancy in new projects; however such activity largely foreshadows...

David Blennerhassett

Hang Lung (10 HK) Is Inexpensive As Dodge & Cox Sells (A Little)

HLG remains dirt cheap at 0.23x P/B, albeit illiquid. Expect HLG to continue to chip away at HLP minorities. I'd be getting some exposure in HLG.

David Blennerhassett

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Short Hysan (14 HK): The 2026 Earnings Cliff and Causeway Bay's Perfect Storm

Plunging luxury retail sales and mainland China's deceleration structurally impaired Hysan's Causeway Bay stronghold, stripping away its...

Jacob Cheng

Increasing HK Duty Free Quota: The Beneficaries

​Potential increase in duty-free quota for mainland visitors to Hong Kong to benefit retail sectors, with Luk Fook as the top jewellery play, Sa Sa...

Osbert Tang, CFA

Soundwill Holdings (878 HK): Foo Family’s Offer at HK$8.50

While the offer is light compared to peer multiples, it is attractive compared to historical trading ranges. A low AGM minority participation rate...

Arun George

Hong Kong Property: In Need Of A Good Story

Upgrading and flight-to-quality in the office space has the affect of lifting occupancy in new projects; however such activity largely foreshadows...

David Blennerhassett

Hang Lung (10 HK) Is Inexpensive As Dodge & Cox Sells (A Little)

HLG remains dirt cheap at 0.23x P/B, albeit illiquid. Expect HLG to continue to chip away at HLP minorities. I'd be getting some exposure in HLG.

David Blennerhassett

Potential increase in duty-free quota for mainland visitors to Hong Kong to benefit retail sectors, with Luk Fook as the top jewellery play, Sa Sa...