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Evergrande Target Price HK$7.72, Giving Buy Rating

2015-04-22 21:11 2077

HONG KONG, April 22, 2015 /PRNewswire/ -- Hang Seng Index has been rising continually. Those leading enterprises listed in Hong Kong attract more attention from major mainland stock brokers. On April 22, CITICS published a research report on EVERGRANDE (3333.HK), giving it a BUY rating and setting the target price at HK$7.72 per share. CITICS is the third major mainland stock broker who published research report on EVERGRANDE this week after Guotai Junan Securities and Haitong Securities published theirs on Monday.  An original report from Sina Leju follows.

According to statistics, there is a 50% opportunity for EVERGANDE stock to rise before reaching the target price of HK$7.72 compared with its closing price of HK$5.09 of April 20, while its shares closed at HK$5.34 on April 22, a single-day rise of 6.8%. EVERGRANDE share price has risen by 13.4% this week. The accumulated increase has reached up to 77.4% since the Shanghai-Hong Kong Stock Connect program was launched in the end of last year. 

CITICS believes that EVERGRANDE is the subverter of the profit model of the real estate industry, it is able to harvest high bonus from good development process operation since its management style is suitable for Chinese real estate industry. Meanwhile, EVERGRANDE has a strong capability to collect sales proceeds, and its sales experience the fast growth rate in Q1 of 2015. In addition, benefiting from different opportunities such as decrease of social financing cost, EVERGRANDE has an edge on VAT reform in terms of its integrated industry chain business model.

Consistent with the opinions of the previous research reports, CITICS believes that diversified industry will become EVERGRANDE's long term profit growth point. According to the latest report, Xu Jiayin, Chairman of the Board of EVERGRANDE, thinks highly of the development of new industry. After witnessing Evergrande Soccer Team progress from the group stage by the first place of the group in Seoul, South Korea on April 21, Xu Jiayin returned to Tianjin that night, and visited Evergrande Wonjin Hospital.

Source: Sina Leju
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