- March 30, 2021
We have published a research report on Minmetals Land (230.HK) following its recent announcement of its 2020 results, maintaining our Hold Rating.
Key Highlights:
- Following the asset injection during 2020, we believe the developer is in a period of restructuring and consolidation of the business.
- While Minmetals Land’s core net profit came in weaker than expected, the strengthened balance sheet shows that the cash flows of the business is strong and healthy.
- Minmetals Land’s core net profit came in weaker than expected at only RMB112m (down 85% YoY), and we believe this reflects the weakness of the business before its asset restructuring during 2020.
- We take comfort from the strengthened balance sheet where net debt to equity has deleveraged to 50% (2019: 79%). This together with the significant increase in contract liabilities (up 180% YoY) on balance sheet implies that the cash flow of the underlying business are solid and healthy, in our view.
- The increase in contract liabilities reflects the solid contracted sales growth of 124% YoY to RMB19,360m underpinned by the asset injection completed during the year.
- We maintain our Hold Rating with the stock trading a 0.31x P/B
