CICC: Country Garden Services (06098.HK) significantly reduces net cash, lowering the downside risk of stock prices, raising the target price to HK$8.36.

According to the app of Wise Wealth News, Goldman Sachs International released a research report stating that the declining trend of profit margin of Country Garden Services (06098.HK) has stabilized. Since its income mainly comes from third-party projects and traditional property management services, it is expected that there is limited room for further decline in profit margin. The bank believes that the company's leading industry share of third-party income and low dependence on related parties can help alleviate the downward pressure on gross profit margin, and with approximately 16.8 billion RMB net cash (corresponding to about HK$5.04 per share), it can strengthen acquisitions to achieve economies of scale or increase dividends when the market improves. The bank maintains a "buy" rating with the target price raised to HK$8.36 (based on a three times 2025 forecasted P/E ratio after deducting net cash), believing that its net cash reserves can help reduce the downside risk of stock prices.