Zhitong Financial APP learned that JPMorgan Chase recently issued a research report, giving Evergrande property (06666) a "better than the market" rating, with a target price of HK $13.

According to JPMorgan, Evergrande property is one of the top three property management companies in China, supported by Evergrande Group (03333; China's top three developers by sales), and is rated better than the big market, with a target price of HK $13. 12-month forward price-to-earnings ratio equal to 25 times, a substantial discount to other large-cap peers (> 45 times earnings).

JPMorgan believes that the recent stock price correction is a good buying opportunity, because once the negative news fades, there will be a strong rebound, driven mainly by three aspects: first, the opportunity to issue an earnings announcement for the first half of 2021 in July. JPMorgan forecasts 55% year-on-year earnings growth; second, August results may be in the management area of good news; third, mergers and acquisitions may be good news.

JPMorgan expects Evergrande's core net profit to grow at a compound annual rate of 42 per cent from 2020 to 2023, making it the top three property management in China, with market share rising from 0.9 per cent in 2020 to 2.6 per cent in 2023. The company's advantage in third-party expansion (bidding and mergers and acquisitions) comes from national brand recognition, focusing on less competitive third-and fourth-tier cities (58 per cent coverage), a strong network (some third-party contracts are available from suppliers) and 11 billion yuan in net cash.