[ET Net News Agency, 9 March 2021] J.P. Morgan trimmed its target price for Logan Group
(03380) to HK$13 from HK$13.5 and maintained its "neutral" rating.
The research house likes Logan's Greater Bay Area-focused land bank (>70%), but JPM also
thinks its unique edge on the high-margin projects (Logan City & Shenzhen) is fading as
they are getting depleted.
By looking at the latest land acquisitions, development margins should revert to the
industry average of 25-30% (versus >35% in 2017 & 2018). Although this can be offset by
the high-margin primary land development segment, a discount should be applied for its
lack of certainty.
JPM thinks the market has already priced in its high net margin (>14% versus peers
average of 10-11%) until 2021 and solid earnings growth (20% CAGR in 2019-22). JPM said it
could turn more positive if there is a longer track record of earnings sustainability in
primary land development, and easing in Shenzhen. (KL)
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03380 LOGAN GROUP
Nominal 
0.810 -0.010 (-1.220%) Research Report
09/03/2021 11:51
{I-bank focus}JP Morgan trims Logan Group (03380) to HK$13
| Remark: | Real time quote last updated: 23/09/2024 16:43 |
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