High-beta Chinese property developers may see a wave of rebound as the Chinese government's property policy will likely remain relaxed in near-term, reported Credit Suisse. Despite the lingering uncertainties over debt repayment, the undemanding valuations of the developers are believed to have priced in the projected lacklustre FY21 results. The broker favored $CIFI HOLD GP(00884.HK)$ and $SUNAC(01918.HK)$ for the near-term.
Credit Suisse further added that, in the medium-term, developers with strong advantage in financing and execution will continued to be liked, as they are considered as better positioned to realize more upside from the current round of supply-side consolidation, which, in turn, supports further re-rating in 2022. The broker selected $CHINA RES LAND(01109.HK)$, $China Overseas Land & Investment(00688.HK)$ and $LONGFOR GROUP(00960.HK)$ as its picks. Credit Suisse also axed the target price of the Chinese developers under its coverage by 12.2% on average.
The latest ratings and target prices of Chinese developers are listed in a separate table.