The Zhitong Finance app learned that Citibank published a research report saying that the “buy” rating for real estate in the US (03990) has a target price of HK$8.7.

The report quoted company management as pointing out that the contract sales target of RMB 70 billion for the full year of 2023 shows some pressure due to factors such as a decrease in saleable resources compared to expectations and a sales ratio of less than 10% from visits. However, the bank mentioned that in the face of market challenges, the company's marketable resources were not oversupplied, and the smooth refinancing situation provided the business with elasticity and contributed to countercyclical growth.

The bank mentioned that the company's asset-light business growth is in line with expectations; gross margin has bottomed out now and next two years, and the dividend rate has stabilized at 40%. The above target price reflects the company's forecast of a price-earnings ratio of 6 times in 2023, which is the historical average of domestic housing stocks over the past 2 years.