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<Research>M Stanley Elevates TPs for CHINA JINMAO and SEAZEN, Cuts CHINA VANKE TP to $3.52
Recommend 15 Positive 28 Negative 18 |
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Morgan Stanley has released a research report commenting that even though the 1H earnings of Chinese property developer stocks largely met expectations, their property development profits were disappointing. Expecting profit compression to persist into 2026 amid diminishing property sales, the broker recommended investors to choose defensive state-owned enterprises (SOEs). Morgan Stanley noted that 2H earnings may remain sluggish despite the low base in 2H23 that could help reduce the YoY decline. The broker lowered its 2024-2026 EPS forecasts for the entire industry by 10%/10%/12% to reflect a weak sales outlook, continued gross profit pressure, and slowing recurring income. Maintaining a cautious stance on the recovery of China's property market, Morgan Stanley preferred property managers including CHINA RES MIXC (01209.HK) and POLY PPT SER (06049.HK) over developers, and suggested investors should continue to hold defensive SOEs such as CHINA RES LAND (01109.HK), GREENTOWN CHINA (03900.HK), and CHINA OVERSEAS (00688.HK). The broker trimmed the TP for C&D INTL GROUP (01908.HK) to $16.81, with a Hold rating; lifted the TP for CHINA JINMAO (00817.HK) to $0.67 from $0.54, with an Equalweight rating; elevated the TP for SEAZEN (01030.HK) to $1.63 from $1.39, with an Overweight rating; and cut the TP for CHINA VANKE (02202.HK) to $3.52 from $5.15, with an Equalweight rating. AAStocks Financial News |
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