To own China Jinmao Holdings Group, you really have to buy into the idea that large scale city projects can keep turning contracted sales into cash in a capital hungry sector. The RMB84,601 million in nine month contracted sales, including projects like Meixi Lake and Qinglong Mountain, speaks to execution on the ground and buyer demand at current pricing. For the near term, that sales run rate feeds into a story where earnings are forecast to grow 32.7% a year, although revenue is expected to expand more slowly than the wider Hong Kong market.
The harder part of the thesis is the balance sheet. Debt is flagged as not well covered by operating cash flow, and all funding is reported as higher risk borrowing rather than customer deposits. That makes consistent project cash conversion crucial. China Jinmao Holdings Group also carries a high P/E of 38x against both its sector and peer averages, even though some models see it trading well below estimated fair value. In the short term, this latest sales update helps the demand side of the equation, but it does not yet answer the funding question.
All of that promise on contracted sales and earnings growth still runs into one uncomfortable financial pressure point that keeps coming back to...
There's only one way to know the right time to buy, sell or hold China Jinmao Holdings Group. Head to Simply Wall St's company report for the latest analysis of China Jinmao Holdings Group's Fair Value.
Disagree with this assessment? Extraordinary investment returns rarely come from following the herd, so go with your instincts.
If you want to broaden your watchlist beyond China Jinmao Holdings Group, the Simply Wall St Screener can help you quickly filter the market down to a focused set of potential ideas that better match your risk level and income needs.
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com