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<Research Report>Citi Expects CN Developers' 2022 Profit at 5-yr Low, Prefers Defensive Names This Mth
2023/02/03 14:29
Citi Research forecast Chinese property developers' 2022 earnings to be at five-year low, with sector core earnings sinking 57% YoY. Among which, over 17 had issued profit warnings, with a few tracking losses, due to asset impairment; margin compression exaggerated by ASP discount; headline reported profit hit by non-core asset write-off and FX loss; revenue fall on sales decline and less unbooked sales.

The broker expected GREENTOWN CHINA (03900.HK), YUEXIU PROPERTY (00123.HK) and CHINA RES LAND (01109.HK) to Outperform; VANKE (000002.SZ) and LONGFOR GROUP (00960.HK) to be flattish; CHINA OVERSEAS (00688.HK), CH OVS G OCEANS (00081.HK) and CHINA JINMAO (00817.HK) to post weak results; COUNTRY GARDEN (02007.HK), SUNAC (01918.HK), R&F PROPERTIES (02777.HK), CIFI HOLD GP (00884.HK), TIMES CHINA (01233.HK), LOGAN GROUP (03380.HK), YUZHOU GROUP (01628.HK) and SINO-OCEAN GP (03377.HK) to suffer losses from trimmed ASP, asset write-off or delivery issues.

Related NewsM Stanley Slightly Inclines TP of LONGFOR GROUP (00960.HK) to $31.1, Rates Overweight
The broker was more inclined to Chinese property developers with high defensiveness, mild expansion and adequate land bank this month. Top picks were CHINA RES LAND, POLY DEVELOPMENTS (600048.SH), YUEXIU PROPERTY and SEAZEN (01030.HK).
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