报告名称：Evergrande Real Estate Group(03333.HK)Sales reach Rmb200bn；land bank structure i
报告类型：港股研究
报告日期：2016-01-05
研究机构：中金公司
股票名称：恒大地产
股票代码：03333
页数：6
简介：What's new
Evergrande (“EG”) announced its 2015 full year saleswere Rmb201bn (+53% YoY), making it the third Chinesedeveloper to ever achieve annual sales of over Rmb200bn,behind Vanke and Greenland.
Comments
Rapid growth supported by abundant saleableresources, but cash flow uncertain. EG acquired nineprojects with 10.4mn sqm land bank through M&A in 2015, arapid growth in saleable resources. We think EG’s 2016 salesgrowth will stay resilient, backed by abundant resources. But westill have concerns about sales quality, as the stellar growth wasachieved under favorable installment terms (lowereddown-payment ratio to 10%) and a loose return policy.
Land bank structure marginally enhanced. In 2015acquisitions, 6%/89% of land bank located in tier-1/-2 cities vs.the 1%/34% of EG’s land bank at end-2014. Land bank quality ismarginally improving. Total cost of all 2015 acquisitions isRmb34bn (or Rmb31bn at present value), a 2% (10%) discountto these projects’ GAV of Rmb35bn.
High leverage remains biggest concern. EG’s net gearing atend-2015 will remain high at 224% after all the acquisitions.High leverage drawn by rapid expansion means EG will be verysensitive to downside in the physical market. We will wait to seewhether EG’s sales growth success will translate into cash inflowand reduced leverage.
Valuation and recommendation
After its land bank update, we raise 2015/16e core NP by7%/8% to Rmb7.7bn/9.1bn, and introduce 2017e coreNP at Rmb11.3bn. Updated 2016 NAV is HK$8.51/sh (+10%).Raise TP by 21% to HK$4.68, after narrowing target NAVdiscount from 50% to 45% to reflect improved land bankstructure. Maintain SELL as financial risk of high leverageremains an overhang.
Risks
Cash collection from sales grows faster than expected.

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