China property shares plunge to new low, Longfor drops to over 3-1/2 year low

Country Garden Services Holdings

10/08/2022 08:05

** Hang Seng Mainland Properties Index  .HSMPI  plunges
close to 6%, a fresh new low and the biggest drop since July 27 
  
    ** UBS downgrades major developers Country Garden  2007.HK ,
Longfor Group  0960.HK , as well as property management
companies Country Garden Services  6098.HK  and Jinke Smart
Services  9666.HK , to "neutral" from "buy" 
    ** UBS also slashes price target for the four companies by
52-66% to their current trading price levels, on contract sales
risks in H2
    ** The Swiss brokerage expects valuation de-rating pressure
for related managers due to market concerns on cash flow leakage
    ** Among the property developers, Longfor Group slumps over
19% to the lowest since Nov 2018
    ** Traders cite market chatters that Longfor has issues
repaying some of its commercial papers. Reuters cannot
immediately verify the speculation
    ** CGS-CIMB Securities says in a note in the afternoon
Longfor's liquidity pressure is "still quite manageable" and it
estimates Longfor's 1H22 results should outperform peers with a
flat core net profit 
    ** Hang Seng Property Service and Management Index  .HSPSM 
drops 4.5%, while main Hang Seng Index  .HSI  eases 2.5%

 ((Clare.jim@tr.com))