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报告摘要

China Property Weekly Digest Summary (Issue No. 64)

Core Content Overview

This report provides an update on the Chinese property market, focusing on policy changes, sales performance, inventory levels, and key company activities. It highlights the impact of these changes on the market and offers investment insights.

Main Points and Key Information

Project of the Week: Poly HK - Wuhan Poly City

Project Name: Wuhan Poly City (武漢保利城)
Developer: Poly HK (119.HK)
Launch Date: 25 January 2014 (before Chinese New Year)
Unit Sizes: 91–137 square meters
ASP (Average Selling Price): Rmb9,700 per square meter (bare units)
Sales Performance: All 764 units were sold within the first week, generating Rmb800–900 million
2014 Sales Target: c. Rmb2 billion
Profit Margins: Expected gross margin of 35%, net margin of 16%

Policy Updates

Kunming: Tightened HPF policies, increased downpayment for second homes from 60% to 70%, revised HPF mortgage caps, and introduced a 2-year "window period" for new HPF applications.
Qingdao: Tightened HPF mortgage approval, requiring 12 consecutive months of HPF contributions instead of 6, and both husband and wife must meet requirements.
Wenzhou: Adjusted HPF mortgage policies to attract talents, increased caps, loosened nationality and age requirements, and reduced contribution periods.
Guangxi: Increased transaction tax on second-hand properties to 6.6% for properties without identifiable original cost.
Chongqing: Raised property tax threshold by 3% for high-end housing.
Xiangyang: Set downpayment for second homes at 60%, revised HPF mortgage caps, and allowed graduates with 6 months of contributions to apply for HPF mortgages.
Cixi: Lowered HPF mortgage cap from Rmb800k to Rmb600k.
Central State Bodies: Employees must wait 5 years after paying off their first HPF mortgage before applying for a second one.
Beijing: Updated property gains tax details, limiting tax-deductible renovation costs to 10% of the total transaction price.
Beijing Land Supply Plan: Split between public and commodity housing at 40% and 60%, with 50% of commodity housing designated for self-occupied use.

Weekly Sales Performance

Tier I Cities: Sales volumes dropped by 59% and 15% w-o-w, while ASPs fell by 38% and increased slightly in some cities.
Tier II Cities: Sales volumes decreased by 15% w-o-w, with some cities showing positive growth.
Tier III Cities: Sales volumes increased by 58% w-o-w in major Tier III cities, while ASPs fluctuated.

Year-to-Date Sales Trends

Tier I Cities: Sales volumes fell by 45%, 15%, and 18% y-o-y.
Tier II Cities: Sales volumes dropped by 52% y-o-y.
Tier III Cities: Sales volumes decreased by 30% y-o-y, with some cities showing improvement.

Inventory Levels

Average Weeks to Digest Inventory: 105 weeks
Tier I Cities: Beijing (70 weeks), Shanghai (56 weeks), Shenzhen (144 weeks), Guangzhou (76 weeks)
Tier II Cities: Hangzhou (188 weeks), Suzhou (72 weeks), Qingdao (146 weeks), Nanjing (43 weeks)
Tier III Cities: Dongying (151 weeks), Nanchong (56 weeks), Huaian (55 weeks)

Investment Outlook

Sector Valuation: Trading at 5.6x FY14F PE, 0.8x P/BV, and 56% discount to NAV (vs. historical average of 9.7x, 1.1x, 37%)
Recommended Stocks: COLI, CRL, Shimao, Country Garden, Franshion, and COGO
Reasons for Recommendation: Strong fundamentals, good track records, and decent presales growth outlook

Company Updates

Sunac (1918.HK): Acquired land in Tianjin with planned GFA of 130,700 square meters and land cost of Rmb1,038 million.
Franshion (817.HK): Acquired land in Shanghai with planned GFA of 212,100 square meters and land cost of Rmb10,098 million.
Poly CN (600048.CH): Acquired land in Guangzhou with planned GFA of 104,400 square meters and land cost of Rmb1,666 million.
Greenland: Acquired land in Wuhan with varying GFA and land cost, with some projects showing a premium over asking price.
Glorious (845.HK): ED and CEO Mr. Liu Ning resigned.
Agile (3383.HK): Issued US$500 million in senior notes.
Beijing Capital Land (2868.HK): Issued Rmb2.25 billion in notes under its US$1 billion mid-term notes program.
China South City (1668.HK): Acquired 35% equity interest in CSC Xi’an for Rmb260 million, making it 100% owned after the acquisition.

Land Market Activity

Land Transactions: Limited activity in Tier I cities, with no transactions reported in Beijing, Shanghai, and Guangzhou.
Tier II Cities: Hangzhou had the most land transactions, with 23 parcels launched and 2 transferred.
Tier III Cities: Wuhan had notable land transactions, with 148,000 square meters of residential land launched and transferred.

Summary of Key Trends

Sales Performance: Generally weak in Tier I and II cities, with some Tier III cities showing improvement.
Policy Tightening: Several cities tightened HPF policies to control demand and manage inventory.
Valuation Opportunities: The property sector is currently undervalued, with certain stocks offering good investment potential.
Inventory Levels: High inventory levels persist, indicating potential for price adjustments and slower sales.
Company Activity: Land acquisitions and financial activities are ongoing, with some developers showing strong performance.