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EVERGRANDE PROPERTY SERVICES GROUP LIMITED

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Delayed Hong Kong Stock Exchange  -  04:08 2022-03-18 am EDT
2.300 HKD   +2.68%
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Take Five: A quarter to forget

03/28/2022 | 02:22am EDT
FILE PHOTO: The Federal Reserve building is seen in Washington, DC

March 25 (Reuters) - As a tumultuous quarter approaches its end, markets will watch U.S. and euro zone data to gauge just how aggressive central banks might get in their fight against inflation.

Also in focus will be Europe's dilemma whether or not to sanction Russian energy exports, potentially causing further price surges and economic difficulty.

Here's your week ahead in markets from Ira Iosebashvili in New York, Alun John in Hong Kong, Sujata Rao, Tommy Wilkes and Dhara Ranasinghe in London.

1/HAWKISH ENOUGH?

Is the Federal Reserve's aggressive trajectory for tightening monetary policy too hawkish, or not hawkish enough? Friday's March U.S. jobs report might show.

Economists polled by Reuters expect 450,000 new jobs were created, versus 678,000 in February.

Hiring far above those estimates will strengthen the case for a 50 basis-point interest rate hike in May. After all, Fed Chairman Jerome Powell has signaled readiness to make a big move if needed.

Despite that, the S&P 500 has managed to nearly halve its year-to-date losses. But watch the U.S. Treasury yield curve, which is getting close to inversion as investors fret about a Fed-induced recession. The bond market rarely gets it wrong.

2/ HARD TO SAY NO

Targeting Russian energy, as the United States and Britain have done, is one of the most powerful levers the European Union could pull to punish Moscow for its invasion of Ukraine. But it remains a divisive choice for the bloc which relies on Russia for 40% of its gas and reeling from a surge in fuel prices.

But as pressure grows to announce a ban, there's been a new twist -- President Vladimir Putin's demand that "unfriendly" countries need to pay for gas in roubles is raising yet more concerns about Europe's energy crunch.

EU leaders could soon agree to buy gas jointly and secure additional U.S. gas supplies. But in the meantime, the debate is causing unease in all kinds of quarters. Oil producing group OPEC, for one, has warned the move could hurt consumers .

3/ UP AND AWAY

When first estimates of March euro zone inflation emerge on Friday, they may test the European Central Bank's narrative that there's no rush to raise interest rates.

Inflation is already at a record high 5.9% and could hit 7% in the coming months. Given the ECB target of 2%, it's unsurprising that some officials are urging one or even two rate moves this year.

A strong inflation print will strengthen their case. But bond markets too suggest higher rates are coming, having priced five moves of 10 bps each by year-end.

Germany's two-year bond yield is up 30 bps in March, set for its biggest monthly rise since 2011. Having spent years deep in negative yield territory amid ECB bond buying to boost inflation, it is fast approaching 0%. That's significant.

4/ THE BEST AND WORST

The first quarter of 2022 was one most investors would prefer to forget. Except of course those trading oil, metals or grains, who would have rejoiced in Brent crude soaring over 50%, and a 30% gain for the CRB commodities index.

It was less rewarding on equities; with a 5% loss, the S&P 500 looks set to break a seven-quarter winning streak. Nasdaq euro zone stocks fared worse while Chinese markets had to cope with renewed COVID-linked lockdowns in many cities.

Bond markets hit milestones unseen, in some cases, for decades. The 140 basis-point rise in two-year U.S. yields is the biggest since mid-1984; the German equivalent will post its largest quarterly rise since 2011.

Unsurprising, given central bankers' acknowledgement that inflation is not after all transitory and interest rates need to rise. Global inflation will hit 6.3% this quarter, the fastest rise in a quarter century, JPMorgan estimates.

Finally, pity those who failed to exit Russia investments on time -- with the country being ejected from equity and bond indexes, they will need to mark their holdings to zero.

5/STILL DIGGING

China's pledge not to roll out a property tax offers only short-term relief to developers, struggling with debt restructuring and access to finance.

Evergrande, the poster child for the sector's difficulties, has revealed new problems at a key subsidiary , and will not publish audited results by the March 31 deadline.

Another embattled developer Kaisa said the same, though others such as China Vanke, Country Garden and Sunac China plan to publish annual results next week.

Developers' shares and Chinese high yield bonds remain under pressure. The property sector woes will remain on investors' must-watch list until some real relief measures emerge.

(Compiled by Dhara Ranasinghe; Editing by Raissa Kasolowsky)


© Reuters 2022
Stocks mentioned in the article
ChangeLast1st jan.
CHINA EVERGRANDE GROUP 8.55% 1.65 Delayed Quote.3.77%
CHINA VANKE CO., LTD. -1.15% 16.27 End-of-day quote.-17.66%
COUNTRY GARDEN HOLDINGS CO. LTD. 0.40% 2.55 Delayed Quote.-60.84%
EVERGRANDE PROPERTY SERVICES GROUP LIMITED 2.68% 2.3 Delayed Quote.-12.88%
KAISA GROUP HOLDINGS LTD. 10.53% 0.84 Delayed Quote.7.69%
SUNAC CHINA HOLDINGS LIMITED -5.18% 4.58 Delayed Quote.-61.12%
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Analyst Recommendations on EVERGRANDE PROPERTY SERVICES GROUP LIMITED
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Financials
Sales 2021 13 478 M 2 119 M 2 119 M
Net income 2021 3 630 M 571 M 571 M
Net cash 2021 13 388 M 2 105 M 2 105 M
P/E ratio 2021 6,48x
Yield 2021 -
Capitalization 20 219 M 3 168 M 3 178 M
EV / Sales 2021 0,51x
EV / Sales 2022 0,30x
Nbr of Employees 81 136
Free-Float 41,8%
Chart EVERGRANDE PROPERTY SERVICES GROUP LIMITED
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Evergrande Property Services Group Limited Technical Analysis Chart | MarketScreener
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Income Statement Evolution
Consensus
Sell
Buy
Mean consensus HOLD
Number of Analysts 3
Last Close Price 1,87 CNY
Average target price 3,79 CNY
Spread / Average Target 103%
EPS Revisions
Managers and Directors
Chang Long Zhao General Manager
Fen Yu Vice General Manager
Sheng Li Duan Chairman
Zhao Hui Guo Independent Non-Executive Director
Yanhong Wen Independent Non-Executive Director
Sector and Competitors