[ET Net News Agency, 16 January 2020] Goldman Sachs lowered its target price for China
Vanke (02202) to HK$32.7 from HK$35.1 and downgraded its rating to "sell" from "neutral".
The research house said Vanke has made inroads into new lines of business such as rental
housing, logistics, commercial operations, etc over the past few years, but Goldman thinks
it will take many years before these can replace lost earnings in its core development
business.
Goldman expects China's annual housing market sales value to gradually decline to an
average Rmb1tn over 2020-2030, reflecting slower urbanization, an aging population, and
housing ownership saturation. It estimated Vanke's cash profit to peak at Rmb54bn in 2020
and then gradually decline until stabilizing at Rmb25bn in 2031 and onward. (KL)