The Zhitong Finance App learned that according to a report released by CICC, it is estimated that Xuhui Holding Group (00884) will have core net profit of 7 billion yuan (up 26.5% year on year) and 9.1 billion yuan (up 30% year on year) in 2019 and 2020, and the growth rate in 2021 may remain around 25%. The bank said it maintained its “outperform the industry” rating and raised the target price by 9% to HK$7.62.

The bank said it expects the company to continue to spend about 10% of annual sales refunds for investment property incubation, and expects its profit compound growth rate of 60% in 2019-2020. Furthermore, the company's land acquisition costs accounted for 34% of sales in the first 11 months, and its balance sheet was stable.

According to the bank, it believes that sales in 2019 may reach 19.5 billion yuan (up 28% year on year, 91% completion in the first 11 months), sales in 2020 will increase 20-25% year on year, and profit margin and equity ratio will improve markedly. It expects the gross sales margin of new projects to be 25%-27% from the beginning of 2019, and the overall equity ratio will increase to 75%.