UBS: Upgraded the rating of Yuexiu Properties (00123) to “Buy” and raised the target price to HK$6.5

The Zhitong Finance App learned that UBS released a research report stating that the rating of Yuexiu Real Estate (00123) will be upgraded from “neutral” to “buy”, and the target price will be raised from HK$5 to HK$6.5. According to the bank, Yuexiu Real Estate's land reserves are of high quality (relatively new), active in land purchases, and active in core cities. It has increased the Group's gross margin forecast for this year and next by 0.3 percentage points each, and raised the in-term profit forecast by 5% to 20%.

UBS pointed out that after four years of downturn in the domestic housing industry, the markets in first-tier and core second-tier cities are gradually showing signs of stability. After China relaxed the price cap measures in the middle of last year, developers were more motivated to improve the quality of real estate and increase differentiation from neighboring second-hand properties. The bank raised its forecast for new home sales in the Mainland by 7% to 16% and the existing housing sales forecast by 7% to 10%. It is expected that national property prices will stabilize as early as early as the beginning of 2026, which was originally expected in mid-2026.