China Property Stocks Priced for Disaster are Bargain to GoldmanBy
Developer valuations near all-time bottom reached in 2008
Goldman Sachs, Citigroup see some developer stocks rallying
A pedestrian walks past derelict buildings slated for demolition and redevelopment, in front of high rise buildings in Dalian, China, on Jan. 18, 2017.
Photographer: Qilai Shen/Bloomberg
China’s property developers are in far better shape than their rock-bottom stock valuations would have you believe. So say top analysts from firms including Goldman Sachs Group Inc. and Citigroup Inc.
As curbs to cool property prices have pushed equity values down near record lows, Goldman Sachs said the market is pricing in a “deep downturn” and that investors are too pessimistic on expected income, especially from some leading developers. Citigroup cites the investment appeal of large developers as the industry enters an era of “mega consolidation.” And China Investment Capital Corp. said builder stocks may surge more than 20 percent in the first quarter as “palpably better-than-expected” home sales act as a catalyst…
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