China Aoyuan Group ADD (No Change) Clarification Should Help to Remove Overhang Consensus Ratings*: Buy 13 Hold 2 Sell 0
Company Flash Note Property Development │ Hong Kong │ July 9, 2019 Insert Insert Hong Kong July 9, 2019 - 11:29 PM China Aoyuan Group ADD (no change) Clarification should help to remove overhang Consensus ratings*: Buy 13 Hold 2 Sell 0 Current price: HK$10.62 ■ A mainland blogger had alleged that Aoyuan inflated its 1H19 contracted sales, which is the key reason for the 15% share price drop on Monday. Target price: HK$12.00 Previous target: HK$12.00 ■ We attribute the discrepancy to different definitions of contracted sales, and Up/downside: 13.0% the source quoted by the blogger may not be correct or complete. CGS-CIMB / Consensus: 0.0% ■ Aoyuan provided clarification in an announcement on Monday night. Overall, Reuters: 3883.HK we believe its contracted sales number is reliable. Maintain Add. Bloomberg: 3883 HK Market cap: US$3,656m A blogger alleged that Aoyuan inflated contracted sales HK$28,519m ● On 6 Jul, a blogger called "李树鹏 2003" on Xueqiu (a popular social media platform in Average daily turnover: US$15.21m China for sharing financial news), quoted "EH Consulting" (a third-party information HK$119.2m provider) as saying that based on Aoyuan's contracted sales in Guangdong Province Current shares o/s 2,534m and the proportion of Aoyuan's sales in Guangdong to its national sales, gross Free float: 45.9% *Source: Bloomberg contracted sales in 6M19 were only Rmb25.7bn, rather than the Rmb53.6bn announced by the company on 2 Jul. Key financial forecasts ● The allegation, coupled with weaker sentiment on the sector due to the Future Land Dec-19F Dec-20F Dec-21F founder issue and sharp decline in the overall market, contributed to its share price Net Profit (Rmbm) 3,345 4,613 5,960 falling by as much as 15% to close at HK$10.62, down 8.6% from last Friday’s price.
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