Deutsche Bank tipped China developer Country Garden as a top blue-chip pick, citing “strong and balanced” growth.
“Although management has not set any sales target, we expect Country Garden to achieve 800 billion yuan (up 45 percent year-on-year) sales this year, given its strong execution to further consolidate the low-tier market,” Deutsche Bank said in a note on Wednesday. “We estimate that its current landbank can provide total saleable resources of greater than 2.2 trillion yuan (around 75 percent were acquired since 2017), which we believe should sustain its strong sales momentum.”
The investment bank said it expected the developer’s higher gross margin of around 25 percent would help Country Garden achieve a compound annual growth rate (CAGR) of more than 40 percent over 2018-20.
It raised its target price to HK$20.42 from HK$19.93 and kept a Buy call.