Citi kept Sell rating on China Evergrande, slashed target price to HK$0.5
Citi kept Sell rating on China Evergrande, slashed target price to HK$0.5

Citi kept Sell rating on China Evergrande, slashed target price to HK$0.5

China Evergrande Group has implemented various measures to address its debt and liquidity pressures, but given the size of its debt, its operations may still face significant challenges and uncertainty as to whether the resources to repay its debt will be able to generate the expected value, Citi Research said in a note. 

As a result of the uncertainty about its ability to continue as a going concern, the company’s auditors have issued a disclaimer of opinion on the financial data for fiscal year 2021 and 2022, and a conclusion of disclaimer of opinion on the financial data for the first half of fiscal year 2023.

Citi kept a Sell rating on China Evergrande and slashed its target price from HK$1.3 to HK$0.5.

Citi expected Evergrande to post losses of 59.8 billion yuan and 20.6 billion yuan in 2023 and 2024, respectively, and may record a profit of 1.5 billion yuan in 2025, with a net profit margin of about 1%.

China Evergrande tumbled nearly 10% to close at HK$0.55 on Tuesday .