BROKER CALL - Singapore-listd Pan Hong 'neutral' after new project results - DMG
SHANGHAI (XFN-ASIA) - DMG said it kept its "neutral" rating on Singapore-listed Pan Hong Property Group after the developer announced results from a new project. The company said it attained a take up rate of 23.5 pct for its Hangzhou Liyang Yuan 226-unit residential project. A total of 53 units were sold at an average selling prices of 9,500 yuan per square meter, according to DMG. The brokerage said the take up indicates that the Chinese property market remains tepid.
"From our view, if take-up does not improve, Pan Hong could be more open to lowering its initial average selling prices," DMG said in a note to clients today. However, DMG noted that margins should still remain attractive at above 20 pct even if prices are slashed given the low acquisition cost of the Hangzhou project. The brokerage also said that it expects the recent loosening of property rules in Shanghai to filter down to lower tier cities in the near term, helping to possibly improve China's home prices by the third or fourth quarter. DMG also kept its
0.25 sgd fair value target on the company. Shares of Pan Hong were unchanged at 0.185 sgd in early trade