[ET Net News Agency, 4 November 2019] Citi Research raised its target price for China
Overseas Property Holdings (COPH)(02669) to HK$5.25 from HK$4.5 but downgraded its rating
to "neutral" from "buy" as the share price has more than doubled year-to-date.
The research house said COPH has been focusing to diversify GFA channels and proactively
explore new services to polish its long-term competitiveness, unavoidably leading to
margin fluctuations during the transitional period (2H 2018-2019) due to upfront
incubation costs, thus yet to provide earnings growth acceleration.
Citi estimated a steady 24% earnings CAGR to 2021, given (1) Secured 20% GFA CAGR on
COLI (00688)/COGO (00081) delivery; (2) 40% CAGR in VAS from a low base with inroads into
new services (e.g. parking spaces in 1H 2019); (3) New staff hiring mostly completed in 2H
2018-1H 2019. (KL)