CCRE 832

CCRE 832

Postby winston » Tue Oct 13, 2009 11:13 am

Not vested. From Phillips:-

Sales in the second and third tier cities are lower than our expectation.
Increase of project investment and shift of credit policy will test the company's capital liquidity.
Idle land will face possible policy pressure.


As our estimation, CCRE's performance will basically be equal to that in 2008. The full-year revenue will be 3.27 billion, net profit will be 0.66 billion, and EPS at 0.33, representing that in 2008.

In 2009 the share price of CCRE has risen by 200%, the company's valuation rallies mainly due to the sector recovery and profit increase. The next 3 years are the main period of CCRE's development, and the company will develop deep in the second and third tier cities from the main cities of Henan province, which is the key for CCRE's performance and share price in the next few years.

Referring to the valuation of Mainland regional developers and CCRE's profit growth as a reference, we give CCRE 8x P/E of 2009, 12-m TP at HKD 3, 39% higher than current close. We give CCRE “Buy” rating.
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