Henderson Land's shares in issue jump to 3,300mn shares

After bonus share issuance took effect.

At the full-year results announcement in March 2015, Henderson Land announced a 1-for-10 bonus share. This bonus share issuance came into effect on 4 June.

According to a research note from Barclays, this resulted in Henderson Land's shares in issue rising to 3,300mn shares from 3,000mn shares.

The greater number of shares in issuance also brings a 9.1% downward adjustment in Barclays' NAV/share from HK$89.28 to HK$81.16.

Here's more from Barclays:

No change in target discount, price target revised to HK$48.70: There is no change in our view on Henderson Land. Keeping our target discount unchanged at 40%, we have also adjusted our price target similarly by 9.1% to HK$48.70 from HK$53.60. With potential downside of 9%, there is no change to our EW rating on Henderson Land.

Prefer office landlords and non-discretionary retail: At the Friday closing price of HK$53.55, Henderson Land is trading at a 35% discount to NAV and FY15 dividend yield of 2.1%.

Among our Hong Kong property coverage universe, we continue to prefer the CBD office landlords and non-discretionary retail landlords.

We believe the upswing in Central rents should benefit landlords like Hongkong Land and Swire Properties, while the non-discretionary retail landlords offer more attractive valuation with Fortune REIT offering a 5.8% FY15E distribution yield. (We rate these three stocks Overweight.)

Key risks: We believe these include: 1) farmland conversions; 2) the pace of US interest rate rises; and 3) more regulation on the redevelopment of old buildings.