[ET Net News Agency, 13 July 2018] HSBC Global Research trimmed its target price for
Guangzhou R&F Properties (02777) to HK$15.4 from HK$22, and reiterated its "hold rating.
Despite a 25% correction in the share price in the past three months and what appears to
be constructive valuation (66% NAV discount and 2.8x 2019 PER), the research house
believes R&F is hard-pressed for a re-rating in the near term due to the combination of
its structurally high leverage and the existing tight credit environment, both onshore and
offshore.
HSBC expects leverage to further edge up in FY2018, as operating cash flow is to remain
negative during the year. (KL)