[ET Net News Agency, 19 March 2020] Goldman Sachs lowered its target price for China
Vanke (02202) by 5% to HK$30.7 and maintained its "sell" rating.
The research house said China Vanke's FY2019 net profit of Rmb38.9bn was 5% below
Goldman's estimate, mainly dragged by slower-than-expected project bookings. Goldman
revised down its 2020-22 EPS forecasts by 9%/9%/5%, to reflect delayed project bookings
from ongoing construction disruption, higher-margin pressures, and latest project
acquisitions.
It expects GPM to decline further by 0.5ppt to 25% in 2020, while SG&A as a share of
contract sales to rise further to 4% (versus 3.3% in FY2019) to reflect additional
cost/expenses needed amid the pandemic. (KL)