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<Research>BofAS Expects Weak 1H25 Results for CN Property Sector, Remains Optimistic on CHINA RES LAND/ CHINA OVERSEAS/ C&D INTL GROUP
Recommend 60 Positive 86 Negative 38 |
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BofA Securities issued a research report believing that 1H25 results for China's property sector to be weak. Therefore, the broker still could not rule out the possibility of moderate real estate policy easing due to continued deterioration in the physical market. The Politburo meeting in July will be a key event. The share price performance of Chinese developers has been divergent YTD, demonstrating the importance of factors such as city location, timing of land acquisition and profit outlook, BofA Securities added. Taking into account the current valuation level, i.e. the projected 2027 PE ratio of 8.5x, or slightly above historical average, the broker was cautiously selective on the sector, and preferred quality companies. BofA Securities continued to be bullish on CHINA RES LAND (01109.HK), CHINA OVERSEAS (00688.HK) and C&D INTL GROUP (01908.HK). The broker reiterated ratings at Underperform on POLY DEVELOPMENTS(600048.SH), MERCHANTS SHEKOU(001979.SZ) and CHINA VANKE (02202.HK) (000002.SZ). BofA Securities predicted a recovery in the sector's earnings for FY2027, supported by a rebound in profit margins. However, due to unstable recovery in contracted sales, the broker lowered its 2027 industry earnings forecast by 3%, and reduced its average target price for the industry by approx. 3%. The latest ratings and target prices of the sector are listed in a separate table. AASTOCKS Financial News Website: www.aastocks.com |
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