Cathay Pacific (00293) and Link REIT (00823) emerged as top performers among Hong Kong high-dividend stocks as the Hang Seng Index struggled to hold the 25,000-point level, closing down 239 points at 24,892. Cathay disclosed it expects first-half shareholder profit of HK$6 billion to HK$6.5 billion, up over 20% year-on-year excluding a HK$1.4 billion gain from Air China stake dilution, while Link REIT announced the sale of a 50% stake in a Sydney office building for approximately HK$1.24 billion. Both stocks offer dividend yields exceeding 6%, outperforming broader indices amid heightened volatility in Hong Kong tech stocks. The aviation sector's gradual recovery and Link's asset reallocation strategy underscore investor preference for stable, income-generating equities in the current market environment.
Cathay Pacific Reports First-Half Profit Guidance of HK$6-6.5 Billion
Cathay Pacific released passenger and cargo traffic data alongside financial guidance at midday, projecting shareholder profit of HK$6 billion to HK$6.5 billion for the first half. Excluding the HK$1.4 billion gain from the dilution of its Air China (00753) stake, the airline's profit increased more than 20% compared to the same period in the prior year. The stock rose 2.6% to close at HK$13.59 following the announcement.
The airline's price-to-earnings ratio stands at approximately 8.2 times, with a dividend yield above 6%. Hong Kong's aviation industry continues to recover, with the second half traditionally representing peak travel season. The current year's summer period has shown relatively strong activity, supporting expectations for continued profitability.
Link REIT Sells Sydney Office Stake for HK$1.24 Billion
Link REIT announced the disposal of a 50% interest in 100 Market Street, a Grade A office building in Sydney, Australia, for approximately HK$1.24 billion. The real estate investment trust stated proceeds will be allocated to fund unit buybacks and investments in core retail properties across the Asia-Pacific region, though the distribution between these two uses has not been specified.
The trust restarted its buyback program in the 2025/26 fiscal year and purchased approximately 4.15 million units over five trading days starting in early July. Link's stock price increased 11% in under a month, with the current dividend yield reaching 6.39%. The trust appointed a new chief executive officer, contributing to investor confidence alongside broader market strength.
High-Dividend Stocks Outperform Amid Index Volatility
The Hang Seng Tech Index fell over 3% to close at 4,668 points, breaching its 50-day moving average, as platform economy stocks including Tencent (00700), Kuaishou (01024), and NetEase (09999) declined between 5.3% and 7.4%. In contrast, Cathay Pacific and Link REIT have outperformed both the Hang Seng Index and Hang Seng Tech Index since early July, recording gains while broader indices remain in recovery mode.
Among Hong Kong stocks with market capitalization exceeding HK$30 billion, only 33 offer dividend yields above 6%. Major mainland banks, which rebounded earlier in the month, saw their dividend yields decline and are largely absent from this group. Some stocks on the list achieved high yields through share price declines or one-time special dividends, distinguishing Cathay and Link as fundamentally supported income plays.
FAQ
What profit did Cathay Pacific report for the first half?
Cathay Pacific expects first-half shareholder profit of HK$6 billion to HK$6.5 billion. Excluding a HK$1.4 billion gain from the dilution of its Air China stake, profit increased more than 20% compared to the same period in the prior year. The airline's stock rose 2.6% to HK$13.59 following the announcement.
Why did Link REIT sell its Sydney office building stake?
Link REIT sold a 50% interest in 100 Market Street, a Sydney office building, for approximately HK$1.24 billion. The trust stated proceeds will be used for unit buybacks and investments in core retail properties across the Asia-Pacific region, though the allocation between these two purposes has not been finalized.
