报告名称：CITIC Ltd.(00267.HK)Sale of residential properties for COLI stake; NAV / EPS acc
报告类型：港股研究
报告日期：2016-03-14
研究机构：高盛集团
股票名称：中信股份
股票代码：00267
页数：8
简介：What's changed
CITIC announced it will sell its residential property projects (5% of 2016E NAV)to COLI (688.HK, Buy; covered by Yi Wang) for HK$37.1bn, HK$29.7bn ofwhich is 1,096mn new COLI shares issued at HK$27.13/sh (5% premium to Friclose) (or c.10% stake), implying 1.3x/1.5x 2015 COLI’s P/B (incl./excl.cumulative property revaluation. Shares have a 2-year lock up and COLI mayappoint one non-exec. director. For the rest, COLI will transfer commercialproperties valued at HK$7.4bn. The residential properties’ reported HK$23bn2015 BV implies 1.6x P/B transaction value. The deal requires approval byCOLI shareholders and China’s Ministry of Commerce. CITIC expects close byend 2016 and is guiding to post-tax disposal gain of HK$9-11bn.
Implications
We think the sale is consistent with CITIC’s long-stated intention to restructureits property business which has historically been managed under twoseparate subsidiaries and thus less efficiently run – CITIC’s residential propertygenerated 6% ROE vs. 16% for COLI (GSe) in 2015. This sale will enable CITICto leverage COLI’s expertise to operate the residential properties whilefocusing its own resources on managing and developing commercialproperties. We estimate CITIC’s property division has total equity value of c.HK$64bn (end-2014). CITIC will still have HK$41bn worth of commercialproperties (completed and under development) on hand, or c. 3.8mn sqmbefore transfer of COLI’s properties), mostly in Beijing, Tianjin and Shanghai.Based on the 1.6x P/B implied valuation (vs. 1.0x we use in our NAV), weestimate the sale is 3% accretive to 2016E NAV, or HK$0.5 per share. We alsocalculate 4% 2015E EPS accretion if CITIC accounts for the COLI stake underthe equity method.
Valuation
We think CITIC’s 6% share appreciation on Fri-Mon prices in the potentialaccretion. At 24% disc. to 2016E NAV (vs. 25% mid-cycle), valuation looks fair.Maintain Neutral and HK$12.2 12-m TP (at 25% disc. to 2016E NAV); ourestimates are also unchanged pending deal completion.

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