News Alert: FY21 results to come largely in-line with expectations
- A-Living released a positive profit alert last Friday, expecting FY21 earnings to grow by c.30% y-o-y (or >40% excl. extended VAS)
- The positive profit alert would indicate a largely in-line set of FY21 results in late-Mar and should be neutral to share price performance
- Despite its deep embedded value on offer, we believe A-Living’s share price will remain pressured in the near term upon 1) ongoing uncertainty on the property side; and 2) likely cuts in growth guidance in late Mar
- We currently have a BUY on the counter with HK$25.91 TP
What’s new?
A-Living released a positive profit alert last Friday that indicates their FY21 earnings would increase by c.30% y-o-y, or no less that 40% excluding contributions from its extended VAS business.
Our view:
FY21 results to come largely in-line with expectations. A-Living’s positive profit alert of c.30% y-o-y increase in FY21 earnings (or 40% excl. extended VAS contributions) would come largely in-line with us and market expectations. We believe this news should be neutral and have limited impact to the company’s share price performance.
Deep embedded value on offer, but near-term performance may remain pressured on continually weak sentiments. As indicated in our latest report (A-Living: Trough valuation in-sight), we believe the company is already trading at an attractive valuation even under the extreme angle of viewing the counter as a dividend play and would offer deep value to investors at current levels. Having said that, we believe A-Living’s share price will remain pressured in the near term alongside 1) weak market sentiment on the counter to continue alongside unresolved uncertainty on the repayment and sales outlook of Agile (3383 HK) and of the sector; and 2) likely cuts in A-Living’s growth guidance during its result briefing in late March.