Construction & real estate / Hong Kong 11 January 2012 Hysan Development Target price: HK$35.20 Up/downside: +35.1% 14 HK | HYSNY US Share price (9 Jan): HK$26.05 Initiation: ready for take-off • Hysan has one of the best pure retail portfolios in Asia and its potential is just starting to emerge • We believe the company is poised for a take-off in earnings and dividend growth, which could last for several years • It offers both growth and defensive appeal; coverage initiated with a Buy rating How do we justify our view? over 3x more than Hysan’s current Risks. We see the main risk as a share price, in three years’ time. We decline in Mainland visitors to Hong apply a 40% discount to our end- Kong. In addition, we believe good 2012E NAV to derive our six-month execution is required to bring out the target price of HK$35.2, implying 35% full potential of Hysan’s portfolio. Jonas Kan, CFA upside potential. (852) 2848 4439 Share price performance
[email protected] Catalysts. The opening of Hysan (HK$) (%) Yannis Kuo Place, scheduled in mid-2012, is a 44 110 (852) 2773 8735 38 100
[email protected] strong potential catalyst, and also one whose significance we believe extends 32 90 Alex Ye beyond driving net-profit growth of 26 80 (852) 2848 4471 21.8% for 2012E and 23% YoY for 20 70
[email protected] Jan-11 Apr-11 Jul-11 Oct-11 Jan-12 2013E. We think Hysan’s retail and Hysan Development (LHS) Relative to HSI (RHS) office portfolio and also Causeway Bay Investment case.