Gate.io's news on August 26th, Industrial International issued a report stating that the target price of Country Garden Services (06098.HK) has been lowered by 32.7%, from HK$5.5 to HK$3.7, mainly due to the fact that operating cash flow (OCF) only accounts for 15% of its core net profit. The rating was downgraded from 'neutral' to 'underperform'. Industrial International pointed out that Country Garden Services' net profit for the first half of 2024 decreased by 38.7% to RMB 1.44 billion, and its core net profit decreased by 31.7% to RMB 1.84 billion, mainly due to a decrease in gross profit. The most significant impact is the sharp decline of 88% in net cash flow from operating activities, with only RMB 270 million, accounting for only 15% of its core net profit. The significant decrease in cash flow is mainly reflected in a increase of RMB 2.2 billion in accounts receivable, mainly due to the credit risk of trading partners and reduced customer confidence.
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ICBC International lowered Country Garden's service target price by 33% and downgraded its rating to 'underperform'
Gate.io's news on August 26th, Industrial International issued a report stating that the target price of Country Garden Services (06098.HK) has been lowered by 32.7%, from HK$5.5 to HK$3.7, mainly due to the fact that operating cash flow (OCF) only accounts for 15% of its core net profit. The rating was downgraded from 'neutral' to 'underperform'. Industrial International pointed out that Country Garden Services' net profit for the first half of 2024 decreased by 38.7% to RMB 1.44 billion, and its core net profit decreased by 31.7% to RMB 1.84 billion, mainly due to a decrease in gross profit. The most significant impact is the sharp decline of 88% in net cash flow from operating activities, with only RMB 270 million, accounting for only 15% of its core net profit. The significant decrease in cash flow is mainly reflected in a increase of RMB 2.2 billion in accounts receivable, mainly due to the credit risk of trading partners and reduced customer confidence.