Large pool of undervalued assets in HK’s property market may spur bargain hunting – JPMorgan
VIEWS & ANALYSIS
Large pool of undervalued assets in HK’s property market may spur bargain hunting – JPMorgan
VIEWS & ANALYSIS

Large pool of undervalued assets in HK’s property market may spur bargain hunting – JPMorgan

 

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A large pool of undervalued assets in Hong Kong’s property market may spur more bargain hunting among majority shareholders as valuations hit a 30-year low, according to JPMorgan Chase. 

The city’s property tycoons may take advantage of the cheap valuations to buy assets, conduct buybacks or take out minority shareholders at a time when developers and landlords are on average valued at a 63% net asset value discount to the aggregate market capitalization, the bank said in a note.

“We believe the uniqueness of the Hong Kong property and conglomerates sector is that their majority shareholders will not be shy to grab opportunities from the market downturn,” it said.

The property sector is trading at a combined market cap of HK$1.1 trillion, while their aggregated net asset value amounted to HK$3 trillion, representing a large pool of undervalued assets that majority shareholders can choose from, it added.