Asia n Insights SparX Hong Kong Property & Retail Sector Refer to important disclosures at the end of this report DBS Group Research . Equity 17 July 2018 Bridge of tourists HSI: 28.316 New mega infrastructure creates better links with China ANALYST Jeff YAU CFA, +852 2820 4912; Higher tourist visitation a boost to retail & hotel sectors
[email protected] Top picks: Wharf REIC (1997), Luk Fook (590) & Sa Sa (178) Mavis HUI +852 2863 8879;
[email protected] New mega infrastructure creates better links with China. The Ian CHUI +852 2971 1915; soon-to-be-commissioned Express Rail Link (XRL) & HK-Zhuhai-Macau
[email protected] Bridge (HZMB) will result in better transportation connectivity Jason LAM +852 29711773 between HK & Mainland China. We estimate XRL could bring in 3m
[email protected] additional Mainland tourists p.a. from 2019, lifting tourist arrival numbers by a decent 7% CAGR for 2017-20. But we should not Top picks underestimate HZMB’s medium-term potential after the Tuen Mun- Closing 12-m Chek Lap Kok Link & SKYCITY come onstream by 2020. In the longer T ick er Mk t Cap Price tgt Px Recom run, prosperity of the Greater Bay Area could raise mobility within the HK$bn (HKD) (HKD) region and increase its GDP (+9% CAGR to US$4.6tn by 2030) and Hong Kong Property spending power, hence further supporting the positive prospects. Far East Consortium 35 HK 10 4.52 5.53 BUY Hysan Development 14 HK 44 42.4 51.15 BUY Increased tourist visitation: a boost to retail and hotel sectors.