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在线翻译:
szdaily -> Markets -> 
Bulls decide property stocks aren’t terrible after all
    2018-07-19  08:53    Shenzhen Daily

CHINA’S property bulls say that bearish investors who sent some developers’ bonds to record lows and their stocks to near-crisis levels have it all wrong.

JPMorgan Chase and Nomura see a share-price rebound looming and Janus Henderson Group said firms’ valuations are out of line with fundamentals.

That’s after the average price of 22 major builders sank to a two-year low of 5.1 times next year’s estimated earnings, near what JPMorgan calls a crisis level. Three similar slides in the past seven years were followed by rallies.

Major developers are set to benefit from further consolidation in the Chinese property industry, analysts at JPMorgan and CGSCIMB Research say.

China’s 30 largest developers accounted for about half of the nation’s home sales in the first six months of the year, up from 38 percent a year earlier.

Another reason not to panic: developers’ funding costs are still below past highs despite a spike for offshore debt. And their revenue continues to grow, with China Evergrande Group forecast by analysts to post a 44 percent gain in 2018, after a 47 percent increase last year.

“Investors are very pessimistic today,” said JPMorgan analyst Ryan Li, one of the most bullish. In six to 12 months, “they’ll find they were wrong.”

He focused on three occasions when low valuations were followed by share price rallies that delivered returns of 146 percent, 52 percent and 113 percent.

Optimism persists even after smaller developers missed debt repayments, China escalated a crackdown on property speculation and financing channels have been tightened.

While developers’ valuations and near-term earnings might appear attractive, the big question is whether the government will keep tightening, said Dai Ming of Hengsheng Asset Management. (SD-Agencies)

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