Citigroup retains "buy" rating for China Overseas Land

Sep. 15, 2009 (China Knowledge) - U.S.-based financial services company Citigroup Inc recently reaffirmed its "buy" rating for China Overseas Land & Investment Ltd<0688>, a real estate subsidiary of China Overseas Holdings Ltd, raising the stock's target price to HK$19.92 from the previous HK$19.82.

Citigroup said that the Hong Kong-listed property developer has recently acquired land parcels at prime locations in Qingdao and Chengdu for relatively low prices, which helped boost its estimated net asset value.

It is also expected that China Overseas Land will add more land reserves at reasonable cost in the future as the local government announced plans to increase land supply. 

During the first eight months of this year, China Overseas Land realized HK$34 billion in total property sales, increasing 80% year on year, while total gross floor area reached 3.62 million square meters, up 103.2% compared with the corresponding period of last year. Property sales hit HK$3.6 billion last month, reflecting a robust year-on-year increase of 218.8%.

According to an earlier report from China Knowledge, China Overseas Land has acquired a piece of land in Shanghai for RMB 7 billion. The land parcel, located in Changfeng Business District, Putuo District, Shanghai, covers an area of 142,108 square meters. The company will build a high-end residential project with gross floor area of 393,500 square meters on the site.

Shares of China Overseas Land slightly edged up 0.39% and closed at HK$18.02 on Monday.