[ET Net News Agency, 11 June 2020] Nomura lowered its target price for Sunac China
Holdings (01918) to HK$46.1 from HK$54 and maintained its "buy" rating.
The research house likes Sunac's large land bank (life 5.5 years) and large exposure to
tier 1 and core districts in tier 2 cities (55%). Nomura expects its contracted sales to
register an 11% CAGR over 2019-21, from CNY556bn in 2019 to CNY690bn in 2021F, making it
the No.2 player in the industry (in terms of sales scale; #4 in 2019).
It thinks Sunac's current valuation discount against Vanke (02202), its closest peer, is
not reasonable. Nomura expects the re-rating to continue with the ongoing degearing (net
gearing 140% in 2020 versus 179% in FY2019. (KL)