20150707-DBS_Group-China_Property_Weekly_Digest_18页_719kb

China Property Weekly Digest Summary (Issue No. 132)

Core Content Overview

This report provides a detailed analysis of the Chinese property market performance for the first week of July 2015, comparing it to the previous week and the same period in previous years. It includes data on sales volume, average selling price (ASP), new projects launched, and inventory levels in Tier I, Tier II, and Tier III cities. Additionally, it features share price performance and peer valuations of key property companies listed on the Hong Kong Stock Exchange.

Key Market Performance

Weekly Sales Performance (Jun 29 - Jul 5)

• Total GFA sold: 4% higher than June's average
• GFA sold by Tier I/II/III cities:
  • Tier I: +12% w-o-w, +138% YTD vs 2014, +29% vs 4 weeks average
  • Tier II: -3% w-o-w, +51% YTD vs 2014, -1% vs 4 weeks average
  • Tier III: +14% w-o-w, +96% YTD vs 2014, +16% vs 4 weeks average
• ASP changes:
  • Tier I: 0% w-o-w, -7.6% YTD vs 2014
  • Tier II: -5% w-o-w, -8% YTD vs 2014
  • Tier III: 1% w-o-w, 6% YTD vs 2014

New Projects Launched

• 32 projects launched in Major Tier I&II cities
• 5 projects launched in Beijing, Shanghai, Wuhan
• Total units launched: 5.5k in Major Tier I&II cities
• Sell-through rate: 61% (down from 76% last week)

Inventory Level

• Inventory in 16 cities: 69 weeks, down from 77 weeks in 2014
• Rolling 26 weeks inventory: stable w-o-w

City-Specific Analysis

Tier I Cities

• Beijing:
  • GFA sold: 377,000 sm
  • ASP: 28,050 RMB/sm
  • GFA change: +51% w-o-w, +146% YTD vs 2014
• Shanghai:
  • GFA sold: 573,000 sm
  • ASP: 26,101 RMB/sm
  • GFA change: -2% w-o-w, +80% YTD vs 2014
• Shenzhen:
  • GFA sold: 179,000 sm
  • ASP: 33,305 RMB/sm
  • GFA change: -2% w-o-w, +201% YTD vs 2014
• Guangzhou:
  • GFA sold: 296,000 sm
  • ASP: 16,037 RMB/sm
  • GFA change: +1% w-o-w, +124% YTD vs 2014
• Tier I average:
  • GFA sold: 356,000 sm
  • ASP: 25,873 RMB/sm

Tier II Cities

• Tianjin:
  • GFA sold: 276,000 sm
  • ASP: 11,357 RMB/sm
  • GFA change: -14% w-o-w, +137% YTD vs 2014
• Hangzhou:
  • GFA sold: 125,000 sm
  • ASP: 9,544 RMB/sm
  • GFA change: -31% w-o-w, +84% YTD vs 2014
• Wuhan:
  • GFA sold: 491,000 sm
  • ASP: 15,794 RMB/sm
  • GFA change: +3% w-o-w, +51% YTD vs 2014
• Chengdu:
  • GFA sold: 186,000 sm
  • ASP: 15,794 RMB/sm
  • GFA change: -1% w-o-w, +51% YTD vs 2014
• Tier II average:
  • GFA sold: 184,000 sm
  • ASP: 9,544 RMB/sm

Tier III Cities

• Dongguan:
  • GFA sold: 242,000 sm
  • ASP: 10,509 RMB/sm
  • GFA change: -11% w-o-w, +129% YTD vs 2014
• Weifang:
  • GFA sold: 81,000 sm
  • ASP: 4,219 RMB/sm
  • GFA change: -10% w-o-w
• Baotou:
  • GFA sold: 87,000 sm
  • ASP: 5,079 RMB/sm
  • GFA change: +30% w-o-w
• Tier III average:
  • GFA sold: 91,000 sm
  • ASP: 5,794 RMB/sm

Share Price Performance and Peer Valuations

YTD Share Price Performance

• HSI: 24,975

Valuation Comparison

• Large Cap:
  • China Overseas: Buy, 38.96 EPS, 7.5 PE, 2.2 PE Yield, 17.2 ROE, 1.5 Net Gearing
  • Country Garden: Buy, 5.25 EPS, 5.4 PE, 5.5 PE Yield, 16.1 ROE, 0.8 Net Gearing
  • CR Land: Buy, 31.30 EPS, 10.7 PE, 2.4 PE Yield, 10.7 ROE, 1.3 Net Gearing
  • Evergrande: Hold, 3.81 EPS, 14.1 PE, 4.1 PE Yield, 6.9 ROE, 0.4 Net Gearing
  • Shimao Property: Buy, 25.16 EPS, 5.2 PE, 4.8 PE Yield, 15.2 ROE, 0.8 Net Gearing
  • China Vanke: Buy, 23.69 EPS, 9.5 PE, 8.5 PE Yield, 17.8 ROE, 1.8 Net Gearing
  • Sino-Ocean Land: Buy, 7.06 EPS, 8.7 PE, 6.8 PE Yield, 8.4 ROE, 0.7 Net Gearing
  • Yuexiu Property: Hold, 1.67 EPS, 5.0 PE Yield, 6.9 ROE, 0.5 Net Gearing
• Mid Cap:
  • Agile Property: Hold, 5.87 EPS, 29 PE, 4.4 PE Yield, 8.8 ROE, 0.3 Net Gearing
  • COGO: Buy, 6.53 EPS, 2.5 PE Yield, 17.5 ROE, 0.4 Net Gearing
  • Dalian Wanda: NR, 3.80 EPS, 32 PE, 4.0 PE Yield, 12.2 ROE, 0.7 Net Gearing
  • Franshion: Buy, 3.80 EPS, 32 PE, 6.9 PE Yield, 9.8 ROE, 0.7 Net Gearing
  • Greentown: NR, 6.53 EPS, 92 PE, 4.0 PE Yield, 12.7 ROE, 0.6 Net Gearing
  • Guangzhou R&F: NR, 6.53 EPS, 10 PE, 3.8 PE Yield, 13.0 ROE, 0.6 Net Gearing
  • Shui On Land: Hold, 1.97 EPS, 133 PE, 3.4 PE Yield, 1.5 ROE, 0.3 Net Gearing
• Small Cap:
  • BJ Cap Land: NR, 2.28 EPS, 10 PE, 3.3 PE Yield, 4.3 ROE, 0.3 Net Gearing
  • BJ North Star: NR, 2.28 EPS, 6 PE, 3.3 PE Yield, 5.2 ROE, 0.4 Net Gearing
  • C C Land: Hold, 2.28 EPS, 39 PE, 2.0 PE Yield, 1.8 ROE, 0.3 Net Gearing
  • Central China: Buy, 3.02 EPS, 6 PE, 2.0 PE Yield, 13.8 ROE, 0.6 Net Gearing
  • Glorious Property: NR, 2.28 EPS, 127 PE, 6.0 PE Yield, 1.2 ROE, 0.2 Net Gearing

Conclusion

The Chinese property market showed a decent start in July 2015, with a 4% increase in total GFA sold compared to June's average. However, the sell-through rate dropped to 61%, primarily due to lower performance in Tier II cities. YTD sales volume increased by 22% y-o-y, while ASP declined by 7.6% y-o-y. Inventory levels remained stable at 69 weeks, lower than the 77 weeks recorded in 2014. The report highlights varying trends across different tiers of cities, with Tier I showing stronger performance than Tier II and III. Share price performance and valuations are provided for a range of property companies, with mixed recommendations from "Buy" to "Hold" and "NR".