A potential winner of market consolidation
? CG reported weaker-than-expected FY21 results with core profit falling 17% yoy, dragged by GPM contraction and lower JV contribution.
? CG aims to improve its land bank quality by replenishing more land in T1/T2 cities through both public auction and M&As.
? Its balance sheet remained healthy with 45% net gearing. This, coupled with its refinancing capability, should provide it a war chest to sustain growth.
? Its attractive valuation of 4.5x FY22 P/E should factor in its weak FY21 results. Our unchanged TP suggests 30% upside. Upgrade to Add.