Investment surplus: The prospect of shareholder returns is bleak, coupled with the risk of asset impairment, downgraded to "sell" (Goldman Sachs)
Goldman Sachs lowered the rating of Merchants Reserve (001914.SZ) from "neutral" to "sell".
Goldman Sachs lowered the rating of Merchants Reserve (001914.SZ) from "neutral" to "sell". The core reason is that the outlook for shareholder returns is bleak and there is the risk of asset impairment. The research report predicts that the company's dividend rate will remain at a low level in the next few years, which is unattractive. At the same time, some of the investment properties it holds are facing downward pressure on fair value, and the risk of asset impairment is another sword hanging above the stock price. The market may still regard China Merchants Jiyu as a stable property stock, but Goldman Sachs believes that its combination of low growth, low return, and high risk makes its valuation premium difficult to maintain in the current market environment, and there are significant downside risks. One-sentence conclusion: China Merchants Precision's current valuation fails to fully reflect its weak shareholder returns and potential asset impairment risks. It lacks investment value in the property sector and is highlights to sell. Good/bad: Strongly bad for investment surplus (001914.SZ). Goldman Sachs believes its share price has not fully reflected the risk of asset impairment and poor shareholder returns. Catalysts: 1) The company's interim financial report, focusing on its asset impairment provisions; 2) The company's future dividend policy and dividend plan.