Stock Idea Here’s one of our top quality picks to unlock o | FSMOne SG - Research Highlights

Stock Idea

Here’s one of our top quality picks to unlock opportunities in the Chinese real estate sector

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• China Resources Land (CR Land) is among the top 10 property developers in China, and one of the few who have met the Three Red Lines.

• We believe that refinancing risk is unlikely to become a concern for CR Land. Moreover, it could take advantage of the cooling land market to replenish its land bank at reasonable prices.

• CR Land’s land bank focus on tier-1 and tier-2 cities underpins the resiliency of its development business. We estimate that its current land bank is sufficient for the company’s development needs in the next four years.

• Aside from its development business, CR Land generates significant rental income from investment properties. Rental income is expected to double by 2025, providing room for a sustainable growth in dividends.

• We value CR Land at a target price of HKD 46.5, representing an upside potential of 43% as of 21 October 2021. While waiting for share price to re-rate, CR Land also offers investors with a forward dividend yield of 5.4%.

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: China Resources Land (HKEX:1109)