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"In the meantime, I don't think people would be willing to pay a premium again," he added. "That's why valuation will not go back to its peak level."
Sun Hung Kai's shares, which account for 2.5 percent of Hong Kong's Hang Seng Index , tumbled 15 percent in the morning session, before recovering somewhat.
Barclays Capital Friday downgraded the stock to '3-Underweight' from '2-Equal Weight' with a 12-month price target of HK$92.16. Citi also dropped the rating on the share from 'Buy' to 'Neutral'. It lowered its target price to HK$115.95 from from HK$165.64.
"We note the investigations into the suspected bribery offence should have no impact on our estimated NAV (net asset value) of HK$165.64 per share; however, investors are likely to apply a deeper NAV discount on the stock due to the uncertainty relating to the investigations," Citi said in a report Friday. The new target price is based on a 30 percent to NAV, Citi said.
"We believe SHKP's strong fundamentals should make the stock a long-term leader in the HK property market; however, we believe in the short term the stock will trade at a relatively deep discount until the ICAC concludes its investigation."
Brook McConnell, president of South Ocean Management, a fund manager in Hong Kong, agreed that valuations for other property firms, which fell in tandem with Sun Hung Kai Properties, are cheap now.
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