Citigroup: Sunac China (01918.HK) has made progress in its debt restructuring, but the sales recovery is slow; the target price is revised down to HKD 0.6.

According to the Zhitong Finance APP, Citibank has released a research report stating that Sunac China (01918.HK) has made substantial progress in its debt restructuring, with financial pressure easing and improved visibility on its balance sheet. Since April last year, the group has reached an agreement with major creditors regarding its offshore debt restructuring plan, and the potential implementation of this plan could provide financial flexibility and stabilize business operations. However, Citibank also pointed out that the groups business operations remain weak, with contract sales in the first seven months of 2026 down 18% year-on-year to 6.4 billion yuan. Profit visibility is limited, and a recovery in property sales is expected to be gradual. The rating is maintained at Neutral/High Risk, with the target price lowered from HKD 1.2 to HKD 0.6, corresponding to an increase in net asset value discount from 70% to 85%.