[ET Net News Agency, 23 December 2020] Citi Research raised its target price for
Greentown China Holdings (03900) to HK$10 from HK$6.38 and maintained its "sell" rating.
The research house said Greentown has been expanding scale and has an aggressive sales
target of Rmb500bn (15% CAGR) by 2025. Although management replenished Rmb300bn (+45%, 60%
attributable stake) of resources in 11-month 2020, the long-term earnings path still looks
challenging on only a 1ppt net profit margin improvement on new land acquisitions.
Citi estimated 2020 GFA completion is below the company's guidance by 6%, given the
record in previous years. The research house also believes profitability will remain
challenging in the next three years with ASP ceilings in T1/2 cities, and estimated GPM to
be 20% to 22% from 2020 to 2022.
Citi added that the shareholding structure under CCCG makes Greentown's positioning
blurry. It thinks re-rating needs clearer positioning from CCCG, and it would take time
for Greentown to improve. (KL)
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03900 GREENTOWN CHINA
Nominal 
5.340 +0.150 (+2.890%) Research Report
23/12/2020 10:17
{I-bank focus}Citi raises Greentown China (03900) to HK$10
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