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<Research>HSBC Global Research Predicts Stability in CN Property Mkt Next Yr; Selloff in CHINA RES LAND Overdone
Recommend 7 Positive 8 Negative 6 |
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HSBC Global Research commented in its recent report that its earlier forecast for Chinese property sales in September to be flattish YoY was overly optimistic. Since July, there has been no improvement in property sales, new housing starts, completions, or housing prices in China. The broker updated its forecast and noted that unless there is unexpected policy stimulus and significant strengthening of existing policies, nationwide sales will not see a real recovery before next year. However, HSBC Global Research pointed out that CHINA RES LAND (01109.HK)'s selloff has been overdone, with most of its valuation premium over peers having vanished. The broker believed that while the group's property development downside risks still exist, even factoring in a significant deterioration in its property development, the company's valuation remains unreasonable due to its robust recurring income and substantial portfolio of high-quality investment properties. The broker maintained a Buy rating on CHINA RES LAND with a TP of $29.6. Despite ongoing adverse factors in China's property sector, HSBC Global Research adopted an upbeat outlook on property managers CHINA RES MIXC (01209.HK) and GREENTOWN SER (02869.HK) and gave both a Buy rating for their stable growth prospects and dividends. Among developers, the broker preferred CHINA RES LAND and LONGFOR GROUP (00960.HK) (rated Overweight with a TP of $15) for their excellent execution and more adaptable rental portfolios that enhance their performance amid consumer downgrades. The broker also preferred property agency Beike (BEKE.US) for its financial stability and diversified income sources. AAStocks Financial News |
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