[ET Net News Agency, 9 December 2020] HSBC Global Research cut its target price for
Shimao Group (00813) to HK$31.5 from HK$40 and maintained its "buy" rating.
Shimao said its 2021 contracted sales will increase by more than 10%. The research house
said this is significantly below the 20-30% 2020-2024 CAGR target released in August. On
the company's conference call, management attributed the more cautious tone to the
persistent policy clampdown, price cuts by its competitors, and rarer M&A opportunities.
Further, price caps and ongoing promotion activities are likely to pressure margins
during the forecast period. However, given the share price reaction, there will be
consideration of a potential share buyback, according to management.
HSBC lowered its FY2021/22 earnings estimates by 4% and 5%, respectively. (KL)