[ET Net News Agency, 26 November 2019] UBS Global Research raised its target price for
Guangzhou R&F Properties (02777) to HK$22 from HK$18.2 and maintained its "buy" rating.
The research house said its channel checks with lawyers and R&F senior management
suggest the saleable resources of R&F's urban redevelopment projects in Guangzhou (not
included in reported landbank) could be worth Rmb750bn, nearly as much as company-reported
land bank of Rmb780bn.
The first of these projects begin presale in December 2019 and the next in July 2020.
Trading at 3.1x 2020 PE, UBS thinks the market has not priced this in due to concerns
about R&F's exposure to lower-tier cities and high leverage.
UBS estimated the urban redevelopment projects could contribute 5% of 2020 contract
sales and 10% of 2021 contract sales. (KL)