Original title: ATFX Hong Kong stocks: China Resources Land debt is relatively good, the recent sharp decline is attributed to the spread of pessimism source: financial circles net
ATFX Hong Kong stocks: at the center of the debt spiral of real estate stocks is China Evergrande: first there are three red line restrictions, then commercial bills default, then banks freeze assets, and now there is the problem of non-payment of Lanzhou land, so intense negative news, China Evergrande shares continue to fall rapidly in reason. However, not all real estate stocks face serious debt problems, and some real estate stocks have well-controlled debt ratios, but have fallen due to the impact of industry pessimism, such as China Resources Land. China Resources Land opened today at HK $28, down 6.81% as of 14:20. Its plunging trend has lasted for five trading days, with a cumulative decline of 17.49%. It is a stock that has been seriously hit by pessimism.
The first of the three red lines is that the asset-liability ratio cannot exceed 70%, while China Evergrande is above 80% most of the time, obviously with too much debt. China Resources Land's asset-liability ratio has always been healthy. As can be seen from the above chart, its asset-liability ratio has remained below 70% for nine years in a row, only slightly exceeding the red line and reaching 72.4% in 2018. Moreover, the asset-liability ratio was repaired to 69.36% a year later, without the persistence of Evergrande exceeding the warning line. The other two of the three red lines, China Resources Land did not cross, are in green stalls.
In terms of total revenue, China Resources Land also performed well. Over the past nine years, total revenue has grown well almost every year. Especially in 2020, when the epidemic was more serious, its total revenue reached 179.5 billion yuan, an increase of 21.5% compared with 147.7 billion yuan in 2019. In addition, the net profit attributed to the parent company is also increasing year by year, with a total net profit of 29.81 billion in 2020, a year-on-year increase of 3.9%. By horizontal comparison, China Evergrande's net profit in 2020 was only 8.076 billion yuan, down 53% from the same period last year. Thus it can be seen that the performance stability and debt quality of China Resources Land is much higher than that of China Evergrande, and the bearish factors on China Resources Land are not applicable to China Resources Land.
Overall view of the team of ATFX analysts: China Resources Land has fallen 33% since April, but its own financial data have performed well and there is no problem of debt and a sharp decline in net profit, such as China Evergrande. In view of this, the decline over the past four months is more due to the fact that China Evergrande has triggered pessimism about real estate stocks and the collapse of confidence among long-term long holders. China Resources Land's latest TTM price-to-earnings ratio is only 5.62, which is at a very low level and undervalued. After the market panic abates, the stock price may perform well.
ATFXDisclaimer：The above content only represents the views of analysts and does not constitute any guidance.