IIFL initiates Ying Li International at Buy

Stock Name: Ying Li
Company Name: YING LI INTL REAL ESTATE LTD
Research House: IIFL

IIFL initiates Ying Li International (5DM.SG) at Buy with a $0.49 target price. It says Ying Li “is uniquely placed among Chinese developers, with a record of over 17 years in developing landmark commercial buildings in Chongqing,” which the house describes as “the pearl of western China.” 

It says Chongqing is the world’s most populous city, with a population of 28.3 million and its GDP growth exceeded 16% in 2010. In addition, the urbanization rate is still at 52% (as compared to 80%-90% in Beijing and Shanghai), with the government’s target to reach 70% by 2020: “this presents a huge opportunity for property investors.” 

It notes Ying Li currently holds around 1 million square metres of land, which is due for completion in phases over the next 3-4 years. “Funding is in place for development and acquisition plans till 2012. We estimate rental income will grow by 6X and adjusted net profit by 18X over the next two years.” 

Shares are off 1.4% at $0.365.