Bank of America Merrill Lynch Initiates Coverage of Times China at "Buy" Rating

HONG KONG, Dec. 19, 2018 /PRNewswire/ -- Times China Holdings Limited ("Times China" or the "Company", which together with its subsidiaries, is referred to as the "Group", HKSE stock code: 1233) is pleased to announce that Bank of America Merrill Lynch ("BAML") has initiated the coverage of the Company at a "Buy" rating with a target price of HK$10.29. BAML said that based on the high visibility in both sales and earnings growth of the Group and its debt payment ability, the Group has an attractive price-earnings ratio of 2.7x for 2019E. The Group is a top pick in BAML's small cap space.

BAML views favorably the Greater Bay Area's long-term development, which is expected to deliver 8% long-run GDP CAGR. On the other hand, the recent policy relaxation in Guangzhou and Zhuhai is also expected to support the sales momentum of the Group. Therefore, BAML estimates that the Group could deliver a 25% sales growth in 2019/20 with a total of RMB250 billion saleable resources. The expected earnings per share will grow at a CAGR of 22% during 2018 to 2022, according to BAML.

BAML also points out that Guangzhou and Foshan jointly issued a new redevelopment policy to speed up the process, which has benefited the Group to unlock the value of its 5.6 million square meters ("sqm") of redevelopment projects. In December, the Group successfully converted two plots with a total of 500,000 sqm into its land bank. Following this trend, BAML expects 1 million sqm conversion each year from 2019 to 2024, which would bring a total of RMB100 billion saleable resources, supporting the sales growth of the Group. The gross margin and net margin of these lands are expected to exceed 35% and 15% respectively.

Various securities firms have reaffirmed Times China at "Buy" ratings in past few months, reflecting the capital market's confidence in and affirmation of the Group's business prospect. Looking ahead, the Group will maintain a prudent financial policy whilst pursuing business growth, aiming at bringing good returns to shareholders and investors.

About Times China Holdings Limited

Times China Holdings Limited is one of the leading property developers in China, focusing on the development of residential properties which are targeting the first-time home buyers and those who have the upgrader demand for the first time. The Group's shares have been listed on the Main Board of The Stock Exchange of Hong Kong since 11 December 2013. Times China positions itself as a "life stylist", with a vision of introducing modern and artistic lifestyles to increasingly affluent middle- to high-income households with relatively high disposable income and strong purchasing power. As at 30 June 2018, the Group had a total of 87 major projects in various stages of development in major cities of Guangdong Province, including Guangzhou, Foshan, Jiangmen, Dongguan, Huizhou, Zhuhai, Zhongshan and Qingyuan as well as in Changsha, Hunan Province.