报告名称：CITIC Ltd：Quick take Property sale confirmed - still positive but not as positiv
报告类型：海外市场
报告日期：2016-03-14
研究机构：瑞士信贷
页数：5
简介：Event
CITIC made an announcement that it's going to sell its residential developmentproperty business to COLI for Rmb31 bn (HK$ 37bn) in total. COLI will pay forthe deal by a combination of share issuance (HK$29.7 bn) and asset exchange(HK$7.3 bn). Compared with our original expectation, the deal size is muchsmaller and the transaction payment is not in cash.Our comments
1.6x P/B deal valuation, but smaller deal size: The asset value that CITICis going to sell is worth Rmb19.2 bn and the total consideration by COLIequals 1.6x P/B. However, the deal size is much smaller than our originalexpectation for two reasons: (1) not all of the development property will besold—only residential property is for sale; (2) the leverage ratio of CITIC'sproperty projects is higher than our expectations.
Still positive, but not as positive as we expected: The pricing is actuallybetter than our expectations, but the way COLI pays for the deal disappointsus: Post the transaction, CITIC will hold 10% of COLI's enlarged equity stake(two-year lock-up period) and some shopping malls, instead of cash.However, overall, we still see NAV lifting by HK$0.6 per share byexchanging 0.8x P/B assets for 1.4x P/B trading COLI's stake and 1x P/Bshopping malls we include in our model. On the other hand, CITIC is tradinglow-tiered city-focused landbank for a more diversifed land portfolio. Rated NEUTRAL: We retain our Neutral stance on CITIC as we still seefundamentals being weak in 2016, with a business focus on the old economy,and further corporate action relatively slow given the business scale.

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