AMTD Research | Radiance (9993.HK): Solid 1H21 All-Round Performance, Maintain Buy

We published a research report on Radiance (9993.HK) on the back of its recent interim results announcement. Please kindly see the full report attached.

Key Highlights:

We believe Radiance has largely locked-in its 2021E and 2022E earnings visibility after reporting a solid set of 1H21 results. The solid 1H21 results implies that 47% of our full-year 2021E core net profit are secured, while its RMB77bn contract liabilities on balance sheet represents 174% of our 2021E revenues. At 4.7x 2021E P/E, we maintain our Buy Rating.

• We believe that Radiance is on track to meet our 2021E core net profit after 47% of our 2021E estimates has been secured during 1H21.
• We also believe that the developer has one of the highest earnings visibility in the sector with its 1H21 RMB77bn contract liabilities representing 174% of our 2021E revenues.
• Radiance has achieved solid contracted sales YTD, marked by a YTD July contracted sales run-rate of 55%, slightly ahead of the sector average of 53.6%.
• Radiance announced a strong set of results for 1H21, with revenues growing 44% YoY to RMB16.1bn and core net profit up 180% YoY to RMB1.49bn, representing 47% of our full-year earnings estimate of RMB3.2bn.
• We believe the stock is trading at inexpensive valuations of 4.7x 2021E P/E and our Target Price of HK$6.04/sh is based on a 6.5x 2021E P/E, offering 38% upside.