- December 31, 2020
- We believe value is emerging among small cap property management companies.
- We believe market is struggling to differentiate the value proposition of different names and thus been sticking to large cap companies backed by big name developers.
- This has resulted in a widening valuation gap between large-cap (47.7x P/E) and small-cap companies (19.5x P/E), offering attractive investment opportunities.
- We believe Aoyuan Healthy Life is underappreciated by the market, especially considering the recent completion of their major M&A of the year (Easy Life).
- For Property Developers, Powerlong, Yuzhou and Redsun under our coverage have already achieved >96% of sales target.
- For Developers: 2021 Contracted sales growth targets to be next catalyst – We believe the announcement of annual contracted sales growth targets in 1Q2021 will be the next catalyst to drive share prices higher.
