Duma reported that Green City Management's (09979.HK) core net profit forecast for 2024 to 2026 lowered its core net profit forecast by 3%, 7% and 9%, respectively, and lowered its target price by 3% to $7.58, to take into account the potential impact of slowing development cycles and a reduction in medium-term social housing construction. With Green City Management's combined earnings growth rate of 19% for 2024 to 2026, a dividend rate of 9% in 2024 and 9.8% based on dividends, it remains the preferred choice for the bank.

Uncertain cash flows may reduce the long-term visibility of dividends, the report noted. Benefiting from its light asset business model and strong client portfolio, Green City Management has healthy cash flow that supports it to still deliver a dividend ratio of 69 to 103% in the face of market weakness. In the event of weak property sales and weaker-than-expected fiscal stimulus policies, Green City Management may face longer payment cycles from project owners, including local governments, which will lead to weaker operating cash flow.