HSBC Research raises the target price of GREENTOWN CHINA to 11.8 yuan and maintains a "Hold" rating

HSBC Global Research report indicates that although GREENTOWN CHINA (03900.HK) saw a 90% year-on-year decline in net profit in the first half of the year, the bank still observed positive performance in its results, including a gross profit margin increase of 0.3 percentage points year-on-year to 13.4%, an increase in the proportion of new projects in the sellable resources for the second half of the year, and a 40 basis point year-on-year decrease in financing costs to 3.6%. However, the bank believes that investors have already anticipated these positive factors, and further upward movement in the stock price requires additional catalysts; maintaining a "Hold" rating.

The bank raised its gross profit margin forecast for 2025 to 2027 by 0.3 to 0.5 percentage points, while lowering its earnings forecasts for 2025 and 2026 by 54% and 39%, respectively, expecting earnings in 2026 and 2027 to grow by 70% and 33% from a low base; the target price was raised from HKD 11.5 to HKD 11.8. (ss/)