Morningstar - Joy City Property Limited (00207) Faster Growth Ahead, New Strategy and Restructuring Heightens Uncertainty

Report

Morningstar

Phillip Zhong

EUR 100.00 For Business Accounts Only

Faster Growth Ahead, New Strategy and Restructuring Heightens Uncertainty

We initiate coverage of Joy City Property with no-moat and stable moat trend ratings, and a fair value estimate of HKD 1.20 per share. Joy City Property is a real estate developer in China. It stands out as one of the few domestic companies that have succeeded in developing and managing quality retail assets, a segment long dominated by Hong Kong players.

Our fair value estimate implies a price/book ratio of 0.5 times, a forward PE of 11 times, and enterprise value to EBITDA of 9 times. Our va...

05/07/2019 12 EN

Underlying

Joy City Property Limited

Joy City Property is an investment holding company. Co. is engaged in the provision of corporate management services. Through its subsidiaries and associated company, Co. is also engaged in the hotel business; personnel management; painting owner; and decoration contractor and trading. Co. organized its business into four operating divisions: decoration contractor; trading of furniture; management services; and investment holding. Co.'s operations are located in Hong Kong, the People's Republic of China and other locations.

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BMG5210S1061 Hong Kong Stock Exchange Bermuda

Provider

Morningstar

Morningstar, Inc. is a leading provider of independent investment research in North America, Europe, Australia, and Asia. The company offer an extensive line of products and services for individual investors, financial advisors, asset managers, and retirement plan providers and sponsors.

Morningstar provides data on approximately 530,000 investment offerings, including stocks, mutual funds, and similar vehicles, along with real-time global market data on more than 18 million equities, indexes, futures, options, commodities, and precious metals, in addition to foreign exchange and Treasury markets. Morningstar also offers investment management services through its investment advisory subsidiaries and had approximately $185 billion in assets under advisement and management as of June 30, 2016.

We have operations in 27 countries.

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Analysts

Phillip Zhong

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Increased risk weighs on JOY CITY PROPERTY, penalising its rating down to Slightly Negative

The independent financial analyst theScreener just lowered the general evaluation of JOY CITY PROPERTY (HK), active in the Real Estate Holding & Development industry. As regards its fundamental valuation, the title still shows 3 out of 4 possible stars. Its market behaviour, however, has slightly deteriorated and will be qualified as risky moving forward. theScreener considers that these new qualifications justify an overall rating downgrade to Slightly Negative. As of the analysis date January 26, 2021, the closing price was HKD 0.48 and its target price was estimated at HKD 0.40.

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January 27, 2021 January 27, 2021 6 EN

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Morningstar | Faster Growth Ahead, New Strategy and Restructuring Heightens Uncertainty

We initiate coverage of Joy City Property with no-moat and stable moat trend ratings, and a fair value estimate of HKD 1.20 per share. Joy City Property is a real estate developer in China. It stands out as one of the few domestic companies that have succeeded in developing and managing quality retail assets, a segment long dominated by Hong Kong players. Our fair value estimate implies a price/book ratio of 0.5 times, a forward PE of 11 times, and enterprise value to EBITDA of 9 times. Our valuation is based on a cost of equity of 12% and a weighted average cost of capital of 8.9%. The compa...

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Faster Growth Ahead, New Strategy and Restructuring Heightens Uncertainty

Increased risk weighs on JOY CITY PROPERTY, penalising its rating down to Slightly Negative

Morningstar | Faster Growth Ahead, New Strategy and Restructuring Heightens Uncertainty

Morningstar | Brand and Execution to Fuel Expansion, but Asset Light and Restructuring Heightens Uncertainty

Business as Usual for No-Moat Lonza; Specialty Ingredients Carve-Out on Track for 2020

Sasol Provides Full-Year Production Update

Astra Posts Solid 2Q, Driven by Strong Cancer Drug Sales and Moving Away From One-Time Divestments

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