Morgan Stanley takes more conservative stance on Australia's HMC Capital, cuts PT

HMC Capital

29/07/2025 24:18

** Morgan Stanley lowers PT on Australia's HMC Capital HMC.AX to A$4.46 from A$5.41

** Brokerage says lowered PT after it removed its FY26 forecast of A$35 mln ($22.83 mln) per year of unrealised gains from co's CP1 private equity fund it previously assumed

** Brokerage cuts FY26/27 profit forecasts by 19-20%, noting recent volatility in CP1's listed equity holdings, which it estimates are currently facing A$20 mln YTD loss

** Adds valuations across all bull/base/bear cases have been trimmed and also assumes HMC will take on A$200 mln in extra debt to close its Neoen deal

** Flags HMC's multi-platform growth aspirations remain intact, but confidence hinges on securing an energy transition partner or a successful divestment; stays "equal-weight"

** Adds near-term share catalysts include performance fees and asset inflows, but execution risk persists amid weaker equity returns and muted sentiment in unlisted funds

** Stock down 62.1% YTD

($1 = 1.5330 Australian dollars)

(Reporting by Rishav Chatterjee in Bengaluru)

((Rishav.Chatterjee@thomsonreuters.com;))