[ET Net News Agency, 13 January 2021] UBS Global Research lowered its target price for
Shimao Property (00813) to HK$20.4 from HK$38.2 and downgraded its rating to "sell" from
"buy".
The research house said Shimao's recently reduced guidance reveals possible pressure
from the proposed "three red lines" policy. UBS thinks investors mainly focus on its
guided growth speed and visibility but overlook potential risks related to on- and
off-balance sheet items, eg, the transaction with Fusheng.
UBS cut its 2021-22 contract sales growth forecasts to 10% p.a. from 20%, and also
lowered its 2020-22 earnings by 10%-28%. The stock is trading at 5.1x 2021 PE, which UBS
thinks the negative factors are not fully priced in. (KL)