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<Research>BofAS Foresees More Aggressive CN Property Policies by Mar/ Apr, Favors CR Land/ COLI
Recommend 8 Positive 13 Negative 2 |
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BofA Securities released a research report maintaining a non-consensus positive view on the Chinese real estate industry, on its anticipation that policy-making by relevant authorities will be more proactive, presenting contrarian investment opportunities, under mounting pressure and low investor positioning. While waiting for a policy inflection point, BofA Securities favored companies with strong execution capabilities such as CHINA RES LAND (01109.HK), CHINA OVERSEAS (00688.HK), and C&D INTL GROUP (01908.HK). It also expected CHINA RES MIXC (01209.HK) to benefit from any consumer stimulus measures. Furthermore, it upgraded ONEWO (02602.HK) to Neutral, as the worst-case scenario seems to be priced in, and a potential transfer of its controlling stake to Shenzhen Metro could present positive event-driven opportunities. Due to downbeat fundamental prospects, the broker maintained an Underperform rating for CG SERVICES (06098.HK), POLY DEVELOPMENTS (600048.SH), and MERCHANTS SHEKOU (001979.SZ). Assuming no policy changes, BofA Securities lowered its median forecast for EPS of Chinese property developers by 8% for 2025-27 and projected a 20% decline in 2025 earnings. Earnings and profit margins were still expected to rebound in 2027 on order delays, but the rebound will be weaker than expected after a weak 2H25. Based on weaker earnings prospects and/or declines in net asset value for non-SOEs (especially CHINA VANKE (02202.HK)), the broker axed its target price for Chinese property developers by 12%. For detailed ratings and target prices by BofA Securities for the aforementioned Chinese property developers, please refer to the separate table. AASTOCKS Financial News Website: www.aastocks.com |
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