Morgan Stanley to increase the rating of China Resources Holdings

Investment rating valuation Morgan Stanley said May 19 that China Resources Land (01109.HK), at HK $14.34, placing 300 million shares to raise HK $4.24 billion would enhance its financial position and expect the net debt ratio to fall to 46% by the end of the year.　　The bank believes that there is sufficient space for resources to invest further. Morgan Stanley said that the China Resources land Allotment in 05 involved the parent company to inject capital, although this may be an exception, but the market optimism can be interpreted as a vision of capital injection. The rating is "overweight" with a target price of HK $13.3.　　Morgan Stanley said the housing stock had risen since this year, and more housing units were expected to take the opportunity to raise funds in the stock market. According to Goldman Sachs, China Resources has placed 300 million shares at HK $14.34 to raise HK $4.24 billion. The bank was not surprised because it estimated that its debt to equity ratios amounted to 60%, with a financing shortfall of HK $3.4 billion. After the allotment, the ratio of liabilities to equity will be reduced to 43%. The share price is higher than the net asset value, so the net asset value forecast in the end of 09 will rise 2%, to 11.26 Hong Kong dollars per share, and 2009-2011 earnings will be diluted 2%. In addition to diluted earnings per share, Goldman Sachs has a negative impact on the rights issue, if similar rights in the next few years will be lower than the same share of equity returns, to maintain a "sell" rating.