Core Viewpoint - CICC initiates coverage on Poly Real Estate (00119) with an "outperform" rating and a target price of HKD 2.15, indicating a 28% upside potential based on 0.24x P/B for 2025/2026 [1][2] Investment Recommendations - Expected EPS for the company in 2025 and 2026 is projected at HKD 0.04 each, with current trading at 0.17x P/B and a 63% discount to NAV. The target price of HKD 2.15 per share corresponds to a 28% upside and a 52% NAV discount [2] - Potential catalysts include sales and land acquisition performance exceeding market expectations in Q4 2025 [2] Valuation Insights - The company has faced long-term pressure on its stock price due to "peer competition" and governance uncertainties, but these issues are being resolved, leading to improved operational and asset quality during the industry downturn. The reasonable valuation range is estimated at 0.35-0.45x P/B based on NAV models and comparable companies [3] Market Positioning - The company possesses unique attributes such as being a Deep Hong Kong Stock Connect target, a state-owned enterprise, and a small-to-mid-cap stock. Low trading activity has constrained value release, but the relatively loose liquidity in the Hong Kong market since the beginning of the year has created a favorable environment for value discovery [4] Operational Performance - From 2020 to 2024, national and top 100 new home sales declined by 44% and 68%, respectively, while the company maintained stable sales between RMB 50-60 billion, improving its industry ranking by 50 positions to 17th. The company is highly likely to achieve its annual sales target of RMB 50 billion, with a potential for slight year-on-year growth [5]
中金：首予保利置业集团(00119)跑赢行业评级 目标价2.15港元