Most Chinese property developers to report falls in H1 earnings, state-owned homebuilders to outperform – UBS
VIEWS & ANALYSIS
Most Chinese property developers to report falls in H1 earnings, state-owned homebuilders to outperform – UBS
VIEWS & ANALYSIS

Most Chinese property developers to report falls in H1 earnings, state-owned homebuilders to outperform – UBS

 

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Most of the Chinese property developers will report declines in their earnings for the first half of 2022, said UBS in a research note. Non-state-owned developers may reduce their dividend payout ratio to preserve cash and state-owned developers are expected to outperform their non-state-owned peers, it said.

China Resources Land, Longfor Group, Poly Developments and Yuexiu Property are predicted to deliver single-digit growth in their first-half earnings, while China Overseas Land Investment Ltd, Country Garden, and CIFI Holdings are expected to record a 30% year-on-year contraction in earnings, said UBS.

Country Garden is expected to lower dividend ratio to preserve cash and CIFI Holdings will likely refrain from dividend payout, UBS forecast.

Looking ahead, the ongoing home mortgage boycott for stalled property projects will continue to bring challenges to contracted sales by non-state-owned developers.

The bank prefers China Resources land and Poly Developments, with the former rated at Buy, with a target price of $45. Investors were advised to avoid most of the non-SOE developers.