[ET Net News Agency, 7 May 2021] Morgan Stanley cut its target price for Yuzhou Group
Holdings (01628) to HK$1.63 from HK$4.54 and downgraded its rating to "underweight" from
"overweight".
The research house said the downgrade was due to (1) disappointing FY2020 results, (2) a
weaker earnings outlook, (3) slowing contract growth with its 2021 contract sales target
set at 4%.
Morgan lowered its earnings forecasts by 31% for 2021 and 34% for 2022. Moreover, it
sees notable pressure on 2022 contract sales growth due to insufficient landbank (duration
of only 1.6 years) and a slowdown in land acquisitions in 2021 as constrained by debt
covenants following weak 2020 results. (KL)