Morgan Stanley has released a research report adjusting its forecasts for Hysan Development (00014). The firm has raised its underlying earnings per share estimate for 2026 by 6%, while trimming projections for 2027 and 2028 by 2% and 9%, respectively. These changes reflect better-than-expected retail and office performance, higher interest expenses due to reduced capitalized interest in fiscal 2027-2028, and updated leasing and occupancy expectations.

The investment bank has lowered its target price for the stock from HK$21 to HK$19, while maintaining a "Market Perform" rating. Morgan Stanley anticipates that the company's dividend will remain steady at HK$1.08 per share between 2026 and 2028.

The report highlights that Hysan Development's net debt ratio remains elevated relative to its peers. Additionally, after accounting for capital expenditures at Lee Garden Eight and distributions on perpetual securities, the company's near-term cash earnings are insufficient to cover dividend payouts. Furthermore, the bank believes that Lee Garden Eight may take a longer period to generate meaningful rental income contributions.