花旗投行部出品-2011中国房地产行业分析及2012预测-政策拐点时间-经管之家官网！

Let the Tempest Unleash More Fury, Policy Turning Point 2Q12E
 Physical market is approaching its worst period, likely Feb 12 — Although China’s
property market has shown tenacious resilience in the past 18 months despite
unprecedented tightening measures, increasing policy risk has prevented the sector
from re-rating. The ice is breaking, though. Since Sep the physical property market has
been deteriorating quickly: sales are weakening and leading developers are resorting
to more price cuts. This is a good start for the sector. More price cuts and decelerating
real estate investment mean greater chances of policy easing. Short-term sales will not
have a significant impact on the sector’s growth outlook and valuation, in our view.
 Governments’ property policy pendulum: Policy easing as early as 2Q12 — The
property market has become the Central Government’s tool to adjust economic
development and balance social public opinion. Reasonable cooling and price
correction in the property market are welcome by governments, but a collapse is ill
affordable. Land sales and property-related tax revenues jointly contribute around 50%
of local governments’ direct/indirect incomes. Moreover, the key funding source, bank
borrowings, relies heavily on local landbank reserves as collaterals. The over-reliance
will persist for the next several years (see Section 1). Broad-based price corrections of
15-20% are necessary to allay public discontent. If the worst emerged in the physical
market in Jan/Feb, the Central Government might have to gradually loosen its
tightening policies as early as 2Q12 and likely ease HPR in tier 2 cities first.
 Our physical market view and NAV/TP revisions — We maintain our FY11 ASP
assumption of a decline of 10-15% in 4Q11, followed by another 10% drop in 2012E
(vs. previous assumption of -5%). GFA sales in 2012 should fall by 10-15% yoy, on our
calculations, but we expect 19 listed residential developers to still record 5.7% average
sales growth in 2012E (in 2008, it was up 7% yoy). On average, we cut our target
prices for China property stocks by 19%, stemming from a 10% average NAV cut after
factoring in our new assumptions and wider targeted NAV discounts. Downgrade
SOHO China, Country Garden and Sino Ocean to Neutral; GZ R&F to Sell (3H).
 Switch to stocks with exposure to tier 1-2 cities and mixed-use project
development capability — Although the mass market and business models geared
toward tier 2-3 cities outperformed in 2H10-1H11, we believe it is now time to switch to
stocks with exposure to tier 1-2 cities, which are more resilient in market downturns,
and to developers with good mixed-use project (residential/retail etc) development
capabilities. Policy risk should gradually reduce in 2012, but rules of the market game
are changing too with the massive release of social welfare housing supply in 2H12.
Before turning aggressive ahead of formal policy easing, we recommend sticking with
CRL, Longfor and COLI. Evergrande is also a top pick due to its strong execution
capabilities and convincing valuation. Our least preferred stocks are GZ R&F and
Greentown both for their business exposure as well as stretched financial positions.
Content
Revisions to Key Assumptions 5
Property Policy: The Govt’s Pendulum;
Relaxation Is Only a Matter of Time 7
Investment Strategy: Deadlock Breaking;
More ASP Cuts; Stick to Quality Plays 22
Top Picks: CRL, Longfor, COLI, Evergrande 27
Market’s 3 key Concerns: Sales,
Financial Position and Supply/Demand 30
1) Sales outlook in 4Q11 and 2012 31
2) Financial positions and liquidity – Getting
stretched but not a big concern 37
3) Supply, Demand and Inventory 46
Citi’s Physical Market View 56
Citi’s refreshed valuation assumptions 56
Geographical Exposure Preference 61
Citi’s NAV and TP Revisions 63
Is 2008 a Good Benchmark for
Valuations? 67
Agile Property Holdings (3383.HK) 74
China Overseas Land & Investment
(0688.HK) 76
China Resources Land (1109.HK) 79
Evergrande Real Estate Group (3333.HK) 82
Franshion Properties (0817.HK) 85
Greentown China Holdings (3900.HK) 88
Guangzhou R&F Properties (2777.HK) 90
Hopson (0754.HK) 93
Longfor Properties (0960.HK) 96
Poly (Hong Kong) Investments (0119.HK) 99
Renhe Commercial (1387.HK) 102
Shimao Property Holdings (0813.HK) 105
Vanke (000002.SZ) 108
Country Garden (2007.HK) 111
Glorious Property Holdings (0845.HK) 114
KWG Prop (1813.HK) 117
Powerlong Real Estate Holdings
(1238.HK) 120
Sino Ocean Land Holdings (3377.HK) 123
SOHO China (0410.HK) 126
SPG Land (0337.HK) 129
Yanlord (YNLG.SI) 132
Appendix A-1