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Property stocks in China
15 Sep 2021 (280 views)

The property stocks in China dropped sharply in recent months, due to the problem faced by Evergrande.

As the company was not able to comply with the three indicators imposed by the government, they were restricted in their sales.

The banks withdrew their credit lines. The long term debts are due. They may not be able to pay these debts. It will lead to bankruptcy of the company.

The problems of Evergrande has affected other property stocks.

A further problem is that the government will control the property prices.

With the sharp drop in the stock prices, are there opportunities to buy some property stocks at attractive discounts, and pose for the recovery over the long term?

I analysed the stocks of the large property developers.

I sorted the stocks according to the total debt to equity (TDE) ratio from the lowest to the highest. 

I would consider a TDE ratio above 90% to be risky. This leaves me to look at the four  stocks at the top of the table.

I find Kerry Properties (0683.HK) to be quite attractive It has a low PE ratio of 5.35 times, an attractive dividend yield of 5.26%, a discount of 67% to asset value and a debt ratio of 35%.

I find China Overseas Land (0688.HK) to be quite attractive also. It has a low PE ratio of 4.1 times, an attractive dividend yield of 6.6%, a discount of 42% to the asset value and a debt ratio of 71%.

Disclaimer. I am giving a personal opinion. I am not giving investment advice to buy or sell any of the above stocks.



 


Property stocks in China
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The property stocks in China dropped sharply in recent months, due to the problem faced by Evergrande.

As the company was not able to comply with the three indicators imposed by the government, they were restricted in their sales.

The banks withdrew their credit lines. The long term debts are due. They may not be able to pay these debts. It will lead to bankruptcy of the company.

The problems of Evergrande has affected other property stocks.

A further problem is that the government will control the property prices.

With the sharp drop in the stock prices, are there opportunities to buy some property stocks at attractive discounts, and pose for the recovery over the long term?

I analysed the stocks of the large property developers.

I sorted the stocks according to the total debt to equity (TDE) ratio from the lowest to the highest. 

I would consider a TDE ratio above 90% to be risky. This leaves me to look at the four  stocks at the top of the table.

I find Kerry Properties (0683.HK) to be quite attractive It has a low PE ratio of 5.35 times, an attractive dividend yield of 5.26%, a discount of 67% to asset value and a debt ratio of 35%.

I find China Overseas Land (0688.HK) to be quite attractive also. It has a low PE ratio of 4.1 times, an attractive dividend yield of 6.6%, a discount of 42% to the asset value and a debt ratio of 71%.

Disclaimer. I am giving a personal opinion. I am not giving investment advice to buy or sell any of the above stocks.