Citigroup: Lower CHINA OVERSEAS (00688) target price to HK$14.2, maintains "buy" rating, leading the industry in various aspects.

Citigroup released a research report stating that it will maintain a "buy" rating on CHINA OVERSEAS (00688) with a target price lowered from HK$17.2 to HK$14.2. CHINA OVERSEAS' attributable contract sales last year fell by 19% year-on-year to 251.2 billion RMB, which is at the industry-leading level. The bank believes that the company's advantage lies in its scale and prime land reserve resources in core cities. Additionally, the company's balance sheet is strong, enabling it to undertake large-scale integrated projects in core cities. In addition, the company's capital expenditure, sales and management expense ratio, and financing costs are all at the industry's lowest levels. Moreover, the company's full industry chain development has seen rental income continue to rise, and it has already issued a Real Estate Investment Trust (REIT). This year, the company's available resources reach 600 billion RMB, with a focus on launching new projects in prime cities in the first half of the year to maintain its industry-leading sales performance. The bank believes that the company's valuation may seem high this year, but as sales and profitability improve in the second half of the year, the valuation should decrease.