(Bloomberg) -- UBS Group AG upgraded China Overseas Land & Investment Ltd. to ‘Buy’ and raised its price target by over 80 percent, sending shares of the developer higher on expectations it will benefit from a rebound in China’s top-tier cities.
“CHINA OVERSEAS is a key beneficiary of the recovery in the property market in tier-one cities,” the bank said in a research report issued Wednesday. UBS also added the Hong Kong-listed developer to its Asia-Pacific focus list.
The Swiss bank lifted its price target to HKD25 from a previous HKD13.8. The new target implies a 53 percent upside from the stock’s last closing price of HKD16.27.
Shares of China Overseas rose as much as 2.1 percent to HKD16.36 in Hong Kong trading following the report. The stock closed up 1.7 percent, with turnover of more than HKD200 million.
The upgrade suggests that some analysts see a bottom forming in the beleaguered Chinese property sector, particularly for state-backed developers with strong balance sheets and exposure to the most resilient markets. Investors will be watching for April property sales data from major developers, due next week, to confirm if a broader recovery is taking hold.
This article is for informational purposes only and does not constitute investment advice.
