HSBC Global Research maintained its target price for China Jinmao (00817) unchanged at HK$4.3 but upgraded its rating to "hold" from "reduce".
The research house believes the worst is behind us and there is now a good opportunity to build positions on the expectation of strong October sales. HSBC thinks investors have had time to digest the "three red lines" policy, while most stocks in HSBC's coverage have sufficient capacity to weather the policy uncertainty.
HSBC said China Jinmao is currently pricing in a 22% FY2021 earnings discount relative to HSBC's current estimate. It noted that China Jinmao's current land bank is sufficient for 7.5 years of development. The estimated unbooked sales to be booked in 2H amounted to RMB16,800mn.
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