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EUR 88.49
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Earnings growth has been very strong over FY17-19, with 113.5% CAGR in revenue, 198.15% CAGR in gross profit and 361% CAGR in PATMI. It has been driven by both an increase in GFA delivered and higher ASP. Moreover, near term earnings growth as well is likely to be strong.
However, operating cash flows have lagged earnings by a very wide margin resulting in a huge increase in borrowings. A large part of this has been funded by associates and non-controlling shareholders, for reasons that aren’t very clear.
While the earnings growth profile of the company looks strong, its valuation is not particularly cheap versus peers and there are already ample number of listed real estate players to choose from.
Ganglong China Property Group IPO
Ganglong China Property Group Limited (GCPG), a real estate developer in the Yangtze River Delta Region with a focus on development and sales of residential properties, is looking to raise up to US$212m in its Hong Kong listing. As per the company, it ranked 83rd among the property developers in the residential property market, in terms of contracted GFA sold in 2019.Earnings growth has been very strong over FY17-19, with 113.5% CAGR in revenue, 198.15% CAGR in gross profit and 361% CAGR in PATMI. It has been driven by both an increase in GFA delivered and higher ASP. Moreover, near term earnings growth as well is likely to be strong.
However, operating cash flows have lagged earnings by a very wide margin resulting in a huge increase in borrowings. A large part of this has been funded by associates and non-controlling shareholders, for reasons that aren’t very clear.
While the earnings growth profile of the company looks strong, its valuation is not particularly cheap versus peers and there are already ample number of listed real estate players to choose from.
Underlying
GANGLONG CHINA PROPERTY GROUP
Provider
Aequitas Research
Aequitas Research is a leading ECM research firm with a focus on IPOs and placements/follow-on offerings across the Asia Pacific with deal size of over USD100m.
Since 2015, we have covered 400+ IPOs and 450+ placements with a hit rate of 73% and 65%, respectively. We combine fundamental bottom-up views with our proprietary quantitative framework to provide a holistic analysis.
Our coverage includes pre-IPO notes before the deal is launched, follow-up analysis once the deal is live and post-listing trading analysis. We also provide a more quant driven analysis on placement/follow-on offerings.
Markets that we cover include:
Hong Kong,
China ADRs,
India,
Japan,
Australia, and
ASEAN.
Hong Kong,
China ADRs,
India,
Japan,
Australia, and
ASEAN.
Sumeet Singh
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