The Zhitong Finance App learned that Morgan Stanley released a research report stating that it adjusted the C&D International Group (01908) risk-return forecast, lowered the target price by 3%, from HK$19.3 to HK$18.64, and maintained a “increase in holdings.”

According to the bank, it has included results for the first half of this year and the impact of existing housing sales policies on property sales, and lowered the 2026-2028 core profit forecast by 1%, 10% and 8%, respectively, to reflect the weakening of property sales under the existing housing sales policy, which was partially offset by better-than-expected interest and savings in sales and administrative expenses. Along with the recent addition of land reserves, the bank added the total valuation by segment and maintained a 35% discount on the updated net asset value and net liability estimates to arrive at the new target price.

The bank expects that C&D International Group can maintain a high dividend payout ratio with a sound balance sheet and the parent company's continued choice to use shares to make the impact on cash flow manageable. The bank believes that the company's state-owned enterprise background and low leverage can support its land supplement and help maintain sales growth higher than that of its peers in the medium term; the current valuation is about 8 times the forward-looking price-earnings ratio and dividend ratio of about 7%, which is attractive.

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