Elevator Pitch
I downgrade my rating for Hong Kong-listed Mainland China property conglomerate Guangzhou R&F Properties Co., Ltd. (OTCPK:GZUHY) (OTC:GZUHF) [2777:HK] from Neutral to Bearish.
Guangzhou R&F's recent divestment of its property management services business is in the spotlight, given that the valuation multiple for the transaction was a relatively low 6 times FY2019 P/E. Also, Guangzhou R&F's contracted sales growth was a disappointing +5% YoY in FY2019, and this year's +10% YoY contracted sales growth seems challenging considering a lackluster performance in 4M2020.
Furthermore, Guangzhou R&F's net gearing was a