Credit Suisse lowers target price for Kerry Properties to HK$36.3

Sep. 15, 2009 (China Knowledge) - Switzerland-based Credit Suisse Group AG recently lowered its target price for shares of Kerry Properties Ltd<0683> to HK$36.3 and retained its "underperform" rating for the Hong Kong-listed property developer.

The Swiss bank said in a report that Kerry Properties' underlying profit in the first half of this year was 31% lower than the bank's estimate due to a much-lower-than-expected gross profit margin on a residential project in Hong Kong called the Belgravia.

Credit Suisse also lowered its 2010 and 2011 earnings forecasts for Kerry Properties by 22% and 29%, respectively, as it expects that the developer's property rental ratio will decline.

Credit Suisse expects that Kerry Properties' profit will be about HK$2.45 billion this year, HK$2.9 billion in 2010 and HK$3.15 billion in 2011.

Kerry Properties, a property and logistics company with investments throughout Asia, reported a HK$1.88-billion net profit for the first half of this year, a decline of 24.3% from HK$2.48 billion a year ago, according to an earlier report from China Knowledge.