Jefferies Research initiated coverage on Longfor Group Holdings (00960) with a "buy" rating and a price target of HK$36.33.
The research house said Longfor is its most favored blue-chip given its 22% earnings CAGR and 4-6% yield with decent margin/gearing, backed by 20+% sales growth and 30% rental growth.
Jefferies likes Longfor's rich saleable resources and quality IP (investment property) portfolio in T1/2 cities, as well as its strong deployment in all property-related segments, which supports medium-term outperformance over large caps.
With 9/16 malls to open in 2H 2019/2020, Jefferies expects the company's total rental income to grow at 30% CAGR to reach RMB8.4bn in FY2021, fully covering its gross interest expenses.
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