Equity Analysis /
Hong Kong

HK : Country Garden - A potential winner of market consolidation

    Raymond Cheng
    Raymond Cheng

    Head of Hong Kong Research

    Steven MAK
    Will Chu
    30 March 2022
    Published byCGS-CIMB

    CG reported weaker-than-expected FY21 results with core profit falling 17% yoy, dragged by GPM contraction and lower JV contribution. CG aims to improve its land bank quality by replenishing more land in T1/T2 cities through both public auction and MAs. Its balance sheet remained healthy with 45% net gearing. This, coupled with its refinancing capability, should provide it a war chest to sustain growth. Its attractive valuation of 4.5x FY22 P/E should factor in its weak FY21 results. Our unchanged TP suggests 30% upside. Upgrade to Add.