Jefferies Research initiated coverage on China Aoyuan Group (03883) with a "buy" rating and a price target of HK$15.39.
The research house said Aoyuan is a national developer with Greater Bay Area (GBA)-focus. It expects Aoyuan's gross margin to remain steady at 25-30%, given low land costs for its M&As/urban renewal projects.
Jefferies believes Aoyuan will deliver the highest earnings CAGR (50%) among peers, and an attractive yield of 8-15% in FY2019-21. Also, Jefferies believes its huge urban renewal pipeline in GBA can secure quality landbank to sustain double-digit sales growth.
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