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【出版时间及名称】：2010年4月中国地产行业研究报告
【作者】：BNP百富勤
【文件格式】：pdf
【页数】：40
【目录或简介】：
Property market rebounded in March 2010, driven by strong demand.
􀂃 A strong property market doesn’t necessarily mean strong share prices.
􀂃 RMB appreciation and rate hikes should have limited impact.
􀂃 Upgrade Agile Property to BUY; Top picks: Shimao and Agile.
Will history repeat itself?
Resilient demand amid tightening
After cooling briefly earlier this year, the property market seems to have revived
from mid-March 2010. Most major cities recorded a strong increase in transaction
volumes, together with gradually rising ASPs. The majority of developers reported
healthy contract sales in 1Q10. This is redolent of 2005-07, when transaction
volume and ASPs in the property market continued to rise amid ongoing
tightening. In view of the current positive sentiment from home-buyers, we believe
the physical property market could see a repeat of the 2005-07 events.
Concerns about government tightening persist
A strong physical market is always a positive for the sector’s fundamentals.
However, there could be a divergence between the physical market and
developers’ share prices. Since June 2009, property prices increased almost 35%
in eight major cities with strong volume, while the sector’s index has declined 9%
during the same period. While the government recently focused more on
developing government-subsidized housing to resolve the housing problem in
China, we believe its overall tightening stance toward the sector will continue for
the rest of the year. This should cap the upside potential of the sector’s
performance. If property prices continue to rise, we believe the government would
certainly introduce new measures or fine-tune its existing policies.
RMB appreciation and interest rate hikes
We do not believe the China property sector will benefit more than other sectors
from RMB appreciation. At the corporate level, we expect China Overseas Land
(COLI) to be the key beneficiary, as 70% of its gross debt is denominated in either
HKD or USD. On the other hand, the impact of rising interest rates on the sector
looks over-played. According to our study, home-buyers in China are rather
insensitive to rising mortgage rates.
Sector recommendation
Supported by an improving property market and healthy YTD contract sales, we
raise our target prices for developers we cover by 10% on average. As the risk of
a sector slowdown abates, we believe the valuation gap between large-cap stocks
and mid-cap stocks will gradually narrow. We upgrade Agile Property to BUY,
reflecting our increasing confidence in its strong execution capabilities. Our top
picks in the sector are Shimao Property and Agile Property. We maintain our
positive view on COLI and CR Land.
Contents
1) Will history repeat itself?........................................................................................................................................................... 3
Resilient demand amid tightening ...................................................................................................................................... 3
Will the resurgence in demand be sustained...................................................................................................................... 3
Mortgage lending still strong .............................................................................................................................................. 3
Contract sales in 1Q10....................................................................................................................................................... 3
Will history repeat itself? .................................................................................................................................................... 4
Government in a dilemma.................................................................................................................................................. 4
Enforcement is the key, not more policies.......................................................................................................................... 5
Government-subsidized housing........................................................................................................................................ 5
Risk of more macro policies should persist ......................................................................................................................... 5
Prefer high-quality mid-cap names..................................................................................................................................... 5
Upside potential shadowed by macro policy ....................................................................................................................... 6
2) RMB appreciation vs interest rate hikes .................................................................................................................................. 7
Will property sector benefit more from RMB appreciation? ................................................................................................. 7
Foreign currency exposure more relevant.......................................................................................................................... 7
Interest rate hike not a major concern................................................................................................................................ 7
Home-buyers are insensitive to rising mortgage rates ........................................................................................................ 8
3) Sector valuation ......................................................................................................................................................................... 9
Sector valuations still look reasonable ............................................................................................................................... 9
Growth momentum abating, but still attractive .................................................................................................................... 9
Narrowing target discount to NAV ...................................................................................................................................... 9
Sector recommendation ................................................................................................................................................... 10
4) 2009 results wrap up................................................................................................................................................................ 11
Margin deterioration worse than expected ........................................................................................................................ 11
Cash-generating capabilities ............................................................................................................................................ 11
Solid financial position...................................................................................................................................................... 12
5) Appendix:.................................................................................................................................................................................. 13
Appendix I BNPP’s geographic preference guide ............................................................................................................. 13
Appendix II: Sector P/E ad P/BV...................................................................................................................................... 15
Appendix III: BNPP China Property Index ......................................................................................................................... 16
Appendix VI: Transaction volume and ASP....................................................................................................................... 17
6) Company updates .................................................................................................................................................................... 21
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