Jefferies Research initiated coverage on Future Land Development Holdings (01030) with a "buy" rating and a price target of HK$12.76.
The research house said Future Land is a top-10 developer with a low-cost land bank worth RMB900bn, and a top-five mall operator in China. Jefferies believes Future Land can sustain double-digit sales growth this/next year with a 30+% margin, and achieve a 50% rental CAGR on a strong mall pipeline.
With a 37% earnings CAGR and 7-13% yield, Jefferies sees the current deep valuation discount (3.5x 12-month forward P/E and 69% NAV discount) offering a defensive entry point.