[ET Net News Agency, 18 December 2019] Morgan Stanley initiated coverage on China
Aoyuan Group (03883) with an "overweight" rating and a target price of HK$15.16.
The research house said Aoyuan's contract sales recorded a 65% CAGR from 2016 to 2019,
and given the high consolidation (95%) and attributable stake (80%), Morgan sees high
earnings visibility with a 53% CAGR, 2018-2021, which is the highest within its coverage
(the sector average CAGR is 22%).
The company targets 25% sales growth, to Rmb114bn in 2019, and Morgan expects 20-25%
growth in 2020. The research house thinks Aoyuan's sales growth is high quality, with an
attributable stake of 80%, versus the sector average of 70%, which should translate into
high revenue and earnings growth. (KL)