[ET Net News Agency, 13 January 2021] UBS Global Research lowered its target price for
Sunac China (01918) to HK$29 from HK$55.1 and downgraded its rating to "neutral" from
"buy".
The research house thinks Sunac has to slow its land acquisition and thus contract sales
to deleverage, as it falls in the red category under the "three red lines". UBS expects
Sunac's contract sales growth to decline by 5% in 2021. It also trimmed its 2020-22
earnings estimates by 4%-17%.
Trading at 3.5x 2021 PE, based on UBS estimates, the research house said valuation is
fair. (KL)