Changshi Group (01113) will announce its interim results on Thursday (August 1st) and will be supported by Bank of America Merrill Lynch
The bank predicts that the core earnings of Changshi in the first half of this year will reach 9.032 billion yuan (equivalent to core per share). Profit of 2.44 yuan), a significant increase of 68.9% over the same period last year of 5.347 billion yuan (excluding the income recorded in the last year after the sale of Central and Century Plaza), I believe that the profit margin of property development in Hong Kong and the Mainland remains It is quite ideal and is expected to reach 40% and 28% respectively. The retail rental income still extends to the second half of last year. It is estimated that Changshi’s interim dividend per share will increase by 8.5% to 0.51 yuan.
Bank of America Merrill Lynch reiterated that it will give Cheung Kong a “Buy” rating with a target price of 81 yuan, a potential increase of 32.6% from the previous closing of 61.1 yuan (down 2.6%).
Bank of America Merrill Lynch lowered its core profit forecast for the year to 1% to 29.576 billion yuan, up 22.5% year-on-year. Meanwhile, core earnings forecasts for 2020 and 2021 are raised 4% and 8% to reflect that mainland businesses will have Better contract sales results.
Bank of America Merrill Lynch estimates the dividend to 0.51 yuan
The bank pointed out that although the contracted sales of Hong Kong in the first half of the year was only about 3.5 billion yuan, the two major focus projects, Phase 1 of No. 21, Po Tat Road, Mid-Levels, Hong Kong Island, and Ai Hoi Estate, Sham Shui Po, Hoi Wan Street will be opened in the second half of the year. It will reach 14 billion and 8 billion yuan; and the 8th phase of Tseung Kwan O Sunrise Cancun is also expected to be launched at the end of this year or early next year, with a value of 13 billion yuan. If the market environment is stable, the above-mentioned urban disk will be absorbed by the market. On the mainland side, the “high-tech field” in Shanghai, which was successfully launched in mid-June, should promote its contract sales in the Mainland.
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Regarding the frequent demonstrations in Hong Kong in the near future, Bank of America Merrill Lynch believes that Cheung Kong’s investment in non-real estate business outside Hong Kong has accounted for 24% of its total assets and should have a hedging effect. In addition, Changshi has a large valuation gap compared to other large developers. Its net asset value per share (NAV) is 47% discount to the stock price. Since this year, the stock price has lagged behind its peers, suggesting that Changshi is more “buy”.