Goldman Sachs cut Longfor Group’s target price to HK$26 from HK$33, rating kept at Buy

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Chinese property developer Longfor Group’s core profit, excluding foreign exchange and revaluation effects, fell 2% year over year in the first half of 2023 to 6.6 billion yuan, accounting for 31% and 29% of Goldman Sachs’ and the market’s original full-year estimates, Goldman said in a note.

Goldman lowered the forecast of Longfor’s 2023 – 25 earnings per share by 22% on average and the estimates for its real estate development revenue and gross margin were cut by 9% and 3.6 percentage points on average, respectively, it said.

Longfor’s target price was cut from HK$33 to HK$26, due to the latest project acquisitions and the yuan’s exchange rate. The rating was kept at Buy, as the broker remained upbeat on the group’s strong balance sheet and promising long-term growth outlook.