BofA update shows where active managers are putting money
Investing.com - Goldman Sachs has upgraded Country Garden Services Holdings (HK:6098) (OTC:CTRGF) from Sell to Neutral while raising its price target to HK$6.30 from HK$5.10.
The upgrade follows what Goldman Sachs describes as "multi-year painstaking business restructuring," including the company’s exit from lower-performing contracts and a renewed focus on its core business by downsizing non-core operations.
Country Garden Services reported first-half 2025 core profit of 1.6 billion yuan, down 15% year-over-year, which represents a slower contraction compared to the 23% decline seen in fiscal year 2024. The company delivered a 15% year-over-year increase in core business revenue, outperforming many property management peers despite its already substantial scale.
The property management firm’s blended collection rate improved by 4 percentage points year-over-year to 90%, supported by technology-empowered collection mechanisms, despite some cash flow challenges in the first half.
Goldman Sachs remains cautious about Country Garden Services’ core business margins, which are currently about 5 percentage points above the normalized industry level, noting these margins "might not be sustainable given its portfolio mix change towards more lower-end segment and macro uncertainties."
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