Lyon: Raised the new target price for urban development to 2.92 Hong Kong dollars, maintain the "outperform the market" rating.

Lyon released a research report stating that Xincheng Development successfully issued $300 million in senior notes, which is the first US dollar bond issued by a Chinese private enterprise since 2023, reflecting market confidence in its balance sheet. The bank believes that the group has abundant financing resources and very low liquidity risk; it has lowered its profit forecast for 2025 by 68.8% to reflect increasing losses in property development, but due to a higher target multiple, the target price has been raised from HK$1.88 to HK$2.92, maintaining an "outperform" rating. The bank pointed out that based on the current low interest rate environment in China and the revaluation of real estate investment trusts (REITs), the group may realize value by splitting its properties into REITs or other securities products. As the group gradually deals with its assets and repays loans, the burden on its residential property development business may decrease. The bank believes that the group can now be seen as a mall landlord with a solid balance sheet rather than a developer, as the scale of losses in its property development business is shrinking.