China Resources Land: Citi buy rating target price of HK $17.14

Citigroup maintained the China Resources Land (1109.HK) buying rating of HK $17.14, which had previously placed 300 million shares at HK $14.34 per share to raise $4.3 billion. The bank said the allotment would lead to a 4%-5% dilution of earnings per share in 2009-11, with little impact, but the net leverage ratio fell below 30%. With the expansion of the capital base ､ the increase in cash after the allotment, combined with strong contract sales, China Resources is expected to be more proactive in land acquisitions in the mainland market for the remainder of the year. And it says the share of the parent company will fall (67.2% of its current holdings), laying the groundwork for future asset injections.