Hongkong Land share price to suffer Trojan Horse?

With a history of 130 years, Hongkong Land is certainly one of the most venerable listed companies in Singapore. Possibly, only Boustead, OCBC’s Great Eastern and UOB’s Haw Par Corp can match Hongkong Land in terms of pedigree and history. If you are talking about prestige, Hongkong Land is even more impressive as its parent company is none other than the famous Jardine Matheson Holdings. Together with Dairy Farm, Jardine C&C, Jardine Matheson Holdings and Jardine Strategic Holdings, Hongkong Land forms the “Hong Kong Five Tigers” that ruled Straits Times Index (STI) for many years.

The Hong Kong Five Tigers are all part of the Jardine Matheson Group and this network of companies established an impenetrable fortress in the SGX mainboard. Nonetheless, what can float a boat can also sink it. In this regard, will the unfolding Hong Kong protests be a Trojan Horse for Hongkong Land share price?

Hongkong Land

Hongkong Land share price in trouble

Troubles certainly come in troops for Hongkong Land share price. Indeed, since the start of the Hong Kong protests, Hongkong Land share price got bombed out, falling from USD6.60 to the current USD5.50.  However, investors who are planning to buy on the cheap and sell on the upside should be mindful of the business dynamics affecting Hongkong Land share price.

As a matter of fact, Hongkong Land had suffered two major corrections (2015 and 2018) prior to the Hong Kong protests. So to attribute the current bearish form of Hongkong Land share price entirely to the civil unrests would not be right. To complicate matters, Singapore government’s cooling measures actually had a hand behind the meltdown of Hongkong Land share price. Also, just like Singapore, the Hong Kong premium office market had just emerged from a supply overhang issue started in 2015, causing the sluggish form of Hongkong Land share price in recent years. These events combined to play a part in the form of Hongkong Land share price.

In my view, the violent Hong Kong protests are just smoke and mirrors for Hongkong Land share price. For sure, the civil unrests had caused some dents to Hongkong Land share price. But once this blows over, which I think it eventually will because no crisis lasts forever, do not expect Hongkong Land share price to storm back in style. This is because this counter is just too prone to regulatory policies, demand/supply and economic conditions that the removal of the uncertainties caused by the protests is unlikely to tip the equation for Hongkong Land share price.

Fortune favours the brave. To be successful in investment, you need to take calculated risks. Given the above context, I will share my insights on whether Hongkong Land share price will see light at end of tunnel soon and whether the narrative makes a compelling investment case. I will also explain my target price of USD3.30 for this counter and share the factors that could shape Hongkong Land share price in this period of turmoil.

Hongkong Land share price walloped

With a Price/Book (P/B) value of just 0.33, many analysts argued that Hongkong Land share price is grossly undervalued. To this end, I do not [This is a premium article. The rest of the content is blocked and can be accessible by SG Wealth Builder Members only. To read the full content, please sign up as member.]

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Updated: October 12, 2019 — 11:48 pm

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