China’s property developers are in far better shape than their rock-bottom stock valuations would have you believe. So say top analysts from firms including Goldman Sachs Group Inc. and Citigroup Inc.
As curbs to cool property prices have pushed equity values down near record lows, Goldman Sachs said the market is pricing in a “deep downturn” and that investors are too pessimistic on expected income, especially from some leading developers. Citigroup cites the investment appeal of large developers as the industry enters an era of “mega consolidation.” And China International Capital Corp. said builder stocks may surge more than 20 percent in the first quarter as “palpably better-than-expected” home sales act as a catalyst.
