[ET Net News Agency, 23 March 2020] Citi Research lowered its target price for China
Evergrande Group (03333) to HK$10.38 from HK$23.7 and downgraded its rating to "sell" from
"buy".
The research house believes Evergrande's profit warning is due to a lower margin after
price cuts and loss from the new energy vehicle. Citi said even if Evergrande's goal looks
ultimately realizable, investors prefer more clarity on earnings growth and de-leveraging.
Meanwhile, the stake offload from CEO Xia in 1Q also triggered investors' concerns.
Citi cut its 2019-21 EPS forecasts by 35-40%, reflecting the difficulties in fairly
assessing the new biz outlook & lower margin. (KL)