Citigroup: Downgrade China Education Group (00839) target price to HK$1.4, reiterating "sell" rating. Rising cost of financing channels.

Wisdom Financial APP learned that, Citigroup released a research report stating that it maintains the 2026-2028 fiscal year forecasts for China Education Group (00839) consistent with the May downgrade, but due to a lack of revaluation basis, the target price was lowered from HK$2.21 to HK$1.4, based on a bottom-of-the- valley P/E ratio of about 2.5 times the core EPS forecast for the 2026 fiscal year (previously about 4 times). At about 0.2 times the P/B ratio, the stock seems attractive, but the higher costs and the lower support of the profit base of the balance sheet with dividends paid make it a value trap. Reiterate "Sell/High Risk" rating; the bank prefers China East Education (00667).