Citi lowered its target price for Hopson Development (00754) to HK$6.4 from HK$6.5, and maintained its "sell" rating against lumpy earnings outlook.
The research house said it is fundamentally cautious on Hopson's rapid expansion plan (target Rmb30-50bn sales in 2019), especially given the challenge of adding new lands and execution (has been slow for 12 years) despite its prime asset portfolio/investment properties and the new CEO.
With the sudden change and uncertainty on its strategy and overhang from corporate governance concerns, its tight liquidity (Rmb19bn short-term debt > Rmb4.5bn cash) also constrain its growth and make it more vulnerable in any downturn, Citi noted.
21/09/2018 17:15
[I-bank focus]Citi cuts Hopson Development (00754) to HK$6.4
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