AMTD Research | Redsun Properties (1996.HK): Solid 1H21 Performance, On Track to Beat Sales Target

We published a research report on Redsun Properties (1996.HK) on the back of its recent interim results announcement. Please kindly see the full report attached.

Key Highlights:

We believe Redsun is on track to deliver a ~40% YoY growth in core net profit following a solid set of 1H21 results. Balance sheet continued to improve, which will underpin the company’s long-term stability, in our view. We maintain our Buy Rating and Target Price unchanged at HK$3.34/sh.

• Redsun achieved solid contracted sales YTD, with 7M21 contracted sales reaching RMB56bn, implying a run-rate of 56.3%, placing it slightly ahead of the industry average of 53.4% and on track to beat its 15% YoY growth target to RMB99.5bn, in our view.
• In addition, we believe Redsun’s clear earnings visibility, solid 1H21 performance, and healthy balance sheet places it on track to achieve our estimated ~40% earnings growth for 2021E.
• We believe the stock is currently trading at inexpensive levels of 4.0x 2021E P/E, and our Target Price offers 26% upside to current levels. Maintain Buy.