JPMorgan Favoring China Resources Land, China Resources Mixc, and China Jinmao; Chinese Property Sector Expected to Continue Outperforming Until April
Market Reaction: Chinese property developer stocks rose, speculated to be linked to the decision by authorities to stop requiring monthly "Three Red Lines" compliance reports, although JPMorgan noted this news was not new.
JPMorgan's Analysis: The firm indicated that the stock rise might be influenced by other market rumors, as no new relevant information was available at the time of their report.
Future Outlook: JPMorgan believes the performance of the Chinese property sector may continue to exceed market expectations until the Two Sessions in March and the CCP Politburo meeting in April.
Investment Recommendations: The report highlighted optimism for specific companies like CHINA RES LAND and LONGFOR GROUP, with the latter being noted for the best risk-reward potential in a policy-driven market.
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M Stanley Predicts Decline in CHINA JINMAO (00817.HK) Share Price Over the Next 60 Days Due to Various Short-Term Challenges
Morgan Stanley's Prediction: Morgan Stanley forecasts a decline in CHINA JINMAO's share price over the next 60 days due to reduced short-term valuation appeal following a recent stock price rise.
Market Outlook: The broker highlights a pessimistic outlook for the real estate market, suggesting that the recent positive sentiment-driven performance is unlikely to continue.
Earnings Projections: Morgan Stanley anticipates multiple short-term challenges for the industry and CHINA JINMAO, including a projected core profit drop of over 50% year-on-year in 2025.
Rating and Target Price: Despite the challenges, Morgan Stanley maintains an Equalweight rating on CHINA JINMAO, citing solid fundamentals and quality land reserves, with a target price set at $1.23.
Citi's Ratings and Target Prices for Chinese Developers (Table)
Citi's Ratings for Chinese Property Developers: Citi has provided investment ratings and target prices for various Chinese property developers, with ratings ranging from "Buy" to "Sell/High Risk" based on their performance and short selling ratios.
Target Prices Overview: Target prices for selected developers include Agile Group at HKD 0.53, C&D International Group at HKD 22.5, and China Overseas at HKD 17.2, reflecting varying levels of investor confidence.
Citi's Ratings for Brokerage Platforms: The investment ratings for Chinese brokerage platforms and project managers also indicate a "Buy" recommendation for companies like KE Holdings and Greentown Management, with target prices set at USD 22.6 and HKD 3.45, respectively.
Market Reactions and Short Selling: The report highlights significant short selling activity across various stocks, indicating market volatility and investor caution, particularly in the context of the Chinese real estate sector.
