DBS expects the short-term property development profits of Henderson Land (00012) to be fully guaranteed.
The Zhitong Finance App learned that DBS released a research report stating that the target price was raised from HK$24.7 to HK$28.1 for a “buy” rating for Henderson Land (00012). The company's basic profit for the year was basically the same as last year, reaching about 9.7 billion yuan, which is lower than expected. This is partly due to the fact that property development profits during the period were lower than expected.
The bank said that since the government abolished the property market promotion at the end of February, market sentiment has improved, and Hengdi's new sales performance has been strong, helping to release value. In less than a month, residential sales revenue is expected to reach about 5.9 billion yuan. In addition to about 17.7 billion yuan in contract sales, it is expected that the company's short-term property development profits will be fully guaranteed. DBS is optimistic that Henderson Land holds the largest reserves of farmland among local developers. It is hoped that any favorable future development news in the northern metropolitan area will boost market sentiment and drive further increases in stock prices; in addition, the increase in profit quality brought about by the expansion of the investment property portfolio will also help increase valuations.