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Investing.com - Morgan Stanley downgraded Greentown China Holdings Ltd (HK:3900) from Overweight to Underweight on Wednesday, while reducing its price target to HK$8.55 from HK$11.62.
The investment bank cited concerns about Greentown China’s recovery timeline, noting that the property developer will likely take longer than expected to return to its pre-downturn earnings levels seen in 2022.
Morgan Stanley pointed to Greentown’s largely flat unbooked sales on an attributable basis, which stood at Rmb144 billion in the first half of 2025, compared to the end of 2024.
The downgrade reflects Morgan Stanley’s revised earnings estimates, which were cut by 15%, 35%, and 22% for 2025-2027, respectively, due to expectations of weaker property sales and slower margin recovery.
At current levels, Morgan Stanley considers Greentown China stock expensive at 11x 2026 estimated P/E and 0.7x trailing P/B compared to the industry average of 8.9x P/E and 0.5x P/B, given the softening outlook for the company.
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