[ET Net News Agency, 6 November 2019] J.P. Morgan raised its target price for China
Vanke (02202) to HK$41 from HK$40 and maintained its "overweight" rating.
The research house thinks Vanke continues to be one of the most misunderstood companies
in the sector. The market wants explicit growth, particularly in contracted sales, but
management focuses on something more implicit, which is the returns of the company.
Hence, JPM believes the market does not appreciate Vanke management's act to balance
sales growth and margins, and would rather have them just grow in scale.
JPM added that every results season serves as a reminder of Vanke's return-focused
strategy, and as China developers space becomes more mature, the value of Vanke will
eventually be realized.
The strong margin in 2018 is a solid indication of its ability to maximize returns, and
this should induce more earnings upgrades, which would be positive to share price, JPM
noted. It expects Vanke to be able to deliver a stable 20-22% ROE all the way until 2021.
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02202 CHINA VANKE
Nominal 
3.690 -0.070 (-1.862%) Others
06/11/2019 17:45
{I-bank focus}JP Morgan raises China Vanke (02202) to HK$41
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