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Citi upgrades K Wah Int'l (00173) to HK$8.01
Citi Research lifted its target price for K Wah 
International Holdings (00173) to HK$8.01 from HK$5.39, and upgraded its rating to "buy" 
from "neutral".
  The research house believes K Wah deserves a catch-up on its share price lag, given (i)
clearer China strategy to build up prime IP portfolio in Shanghai and fasten asset churn 
in other markets, reduce sales lumpiness; (ii) highly visible earnings (HK$8.9bn sales in
HK Kai Tak K City will be booked in 2018) and contract sales pipeline in 2018; (iii) only
2.1% funding cost/ 16% net gearing to embrace more opportunities amid tighter credit; (iv)
any increase in dividend from its 3.8%-owned Galaxy (00027); (v) potential share buyback 
by management.
  Citi views K Wah's downside is also well protected given its 66% NAV discount
(ex-Galaxy, other biz even at 87% discount), 4.4x 2018 PE and 3.6% yield.

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