- April 09, 2021
Baishizhou project has finally completed its Phase 1 contract signing and is due to start construction imminently. We believe this is encouraging progress and should alleviate some investors’ concerns following the completion of its asset injection in Aug 2020. We see deep value in the stock at 85% Disc. to NAV. Maintain Buy
Key Highlights
- LVGEM’s Baishizhou project has made significant project, as they have recently completed the Phase 1 of its contract signing. As a result, we believe the project will start contributing to 2023E contracted sales, in-line with the original planning.
- Meanwhile, LVGEM’s balance sheet has significantly improved as the injection of the Baishizhou project has enlarged its equity base, deleveraging its balance sheet in the process.
- We maintain our Buy rating as we see deep value in its stock, which is trading at 85% disc. to NAV.
- We believe there could be potential surprise for an earlier than expected pre-sales if the project meets pre-sale permit requirements ahead of schedule and this could be a potential catalyst to unlock the deep value.
