LGFRY - Longfor Group: Premium Valuation Unjustified Given Lowered Growth Expectations
Elevator Pitch
I maintain my "Neutral" rating on Hong Kong-listed Mainland China property developer Longfor Group Holdings Limited (OTCPK:LGFRY) (OTCPK:LNGPF) [960:HK].
The coronavirus outbreak led to a construction halt for its property projects and rent reductions for its malls, but there are signs of recovery and normalization since March 2020. Nevertheless, Longfor Group still only expects contracted sales in FY2020 to grow by +7.2% YoY, which is lower than +20.9% YoY contracted sales growth achieved in FY2019. The company's rental income growth for shopping malls is also expected to moderate from