Citi has issued a research report initiating coverage on C&D INTL GROUP (01908) with a Buy rating and forecasting a dividend yield of 6.4%. This follows the company's successful developer handover in March 2025, the implementation of an employee stock ownership incentive plan, and progress on urban renewal projects.

The bank has raised its valuation multiple, increasing the projected price-to-earnings ratio for the current year from 9x to 10x. Consequently, the price target has been lifted from HK$16.9 to HK$18.8, reflecting an improved sales outlook and performance.

The report notes that sales in the company's key front-line cities have already shown signs of recovery. Citi maintains an optimistic stance on the stock for several reasons. Sales improved year-on-year by 13% in April and May, with sales value in the ten key cities growing by 8.4%.

Land bank replenishment has accelerated, including a new project acquired in Shenzhen in June. The company has already allocated 4.5 billion yuan for land purchases in the first five months of 2026. A significant 82% of the land bank has been acquired since 2022, which is expected to support better profit margins.

Furthermore, the company's financing costs remain low at 3.15%. It has also made substantial impairment provisions totaling 17.2 billion yuan for the period from 2022 to 2025.