Zhitong Financial APP learned that CICC reported that Sunac China (01918) is now trading at a price-to-earnings ratio of 4.9 times 2020 earnings, and his valuation is still low. Taking into account the improvement in market sentiment, the company is expected to achieve a compound growth rate of 20% and 25-30% in sales and earnings from 2019 to 2020, respectively, thus raising the company's target price of 9% to 57 Hong Kong dollars, reiterating the "outperform industry" investment rating.

The bank believes that the company's existing land can support sales in the next 3-4 years, with a gross profit margin of about 30%, while the company's unsettled sales in the first half of 2019 can support profits in the second half of this year and 2020, and that the company can maintain high-quality sales growth in the future. In addition, the bank said that the company's leverage reduction is progressing smoothly, and the debt ratio is expected to fall to 140% for the whole of 2019, financing costs may fall in the future, and the new acquisition company is expected to bring back 40-5 billion sales rebates for Sunac China in 2019.

The bank left its earnings forecast unchanged, raising its target price by 9 per cent to HK $57 based on a discount of 13 per cent of net asset value per share (NAV) to 6.50 times earnings for 2020.