CG Services 6098

[winston]

<Research>UBS: CG SERVICES (06098.HK) Issues Profit Warning & Under Margin Pressure; Reiterates Sell

CG SERVICES (06098.HK) earlier issued a profit warning, expecting interim unaudited net profit attributable to shareholders for 1H24 ending June this year to range from about RMB1.36 billion to RMB1.55 billion, a YoY decrease of 34% to 42%.

UBS said in a research note that it remained concerned about the impairment risk and deteriorating margins of CG SERVICES as the mainland property management industry faces downward pressure on margins and uncertainty over its exposure to the receivables of its connected developer, COUNTRY GARDEN (02007.HK) 0.000 (0.000%) .

Related News: CG SERVICES (06098.HK) Projects Interim NP to Plunge 34.1% - 42.2% YoY

UBS added that most of the impairment provisions for 2022 and 2023 were made in 2H.

By the end of 2023, the company had an uncollected third-party receivable balance of RMB15.6 billion.

The broker believed that there would be downward pressure on the full-year earnings of CG SERVICES, and therefore set its target price at $2 and reiterated its Sell rating.

Source: AAStocks Financial News

http://www.aastocks.com/en/stocks/news/ ... -news/AAFN