=MARKET BUZZ: Shenzhen Investment's Lagging Sales Don't Deter Guotai Junan
HONG KONG (Jun 14) -- Shenzhen Investment down 2.9% at HK$3.07 after company posted CNY832 million in May contracted sales that was down 2.9% on-month but up 18.9% on-year; contracted sales in Jan-May down 60.3% on-year at CNY3.31 billion. Guotai Junan Securities notes company has achieved only 22.1% of its 2018 annual sales target, but adds it still expects "moderate rebounding for contracted sales, given more saleable resources launching in the future." Cites its funding costs, which remain at low levels, and a "quality land bank" that can help stabilize gross margins, as house keeps its accumulate rating and TP of HK$3.61; says TP implies a 54% discount to its estimated NAV this year, 9.8x 2018 underlying price-to-earnings and 0.6x 2018 price-to-book. Note, company in March put saleable value of properties for this year at CNY31.7 billion, with target to sell CNY15 billion, about 30% higher than in 2017.
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