Equity Analysis /
Hong Kong

HK : Shimao Group - Striving for double-digit earnings growth

    Raymond Cheng
    Raymond Cheng

    Head of Hong Kong Research

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    Steven MAK
    Will Chu
    CGS-CIMB
    30 August 2021
    Published byCGS-CIMB

    1H21 results were in line, with core profit up 11% yoy, backed by 14% revenue growth. It declared an interim DPS of HK$0.7 (+17% yoy). Management expects the industry’s GPM to be under pressure ahead but thinks Shimao will be less affected given its cost efficiency. Management maintains its double-digit FY22/23 sales and net profit growth targets, subject to its ability to replenish its land bank with reasonable cost. Reiterate Add, with a lower TP of HK$24.6. Shimao trades at an attractive valuation of 3.4x CY21F P/E and offers 10% yield.