Market Report Summary - 13 May 2015
Core Content
This market report provides an overview of the financial performance and market dynamics across various sectors and regions, focusing on the property development sector and the TMT (Technology, Media, and Telecommunications) sector. It also includes a detailed analysis of Future Land Development (1030.HK) and its restructuring plan for dual listing, along with relevant financial metrics and market data.
Main Points
Future Land Development (1030.HK)
- Dual Listing Plan: Future Land Development is planning a dual listing by converting its B-shares to A-shares through a restructuring. The conversion ratio is 0.827:1.
- Financing and Business Development: The dual listing is expected to provide cheaper financing and support the company's property development and investment activities.
- Revaluation Opportunity: The company believes there is potential for revaluation due to the discrepancy between its current market cap and the value of its stake in the A-share listed company.
- New Entity: Future Land Holdings, a wholly owned subsidiary, will absorb all the assets and liabilities of Jiangsu Future Land (JFL) and will be listed in the A-share market by the end of September 2015.
- Share Conversion Options: B-share investors can choose between converting to A-shares at US$1.317 or receiving a cash alternative at US$1.000.
- Valuation Metrics: Future Land is currently trading at 6.1x/5.3x of 2015F/2016F PE and 0.6x/0.5x of 2015F/2016F PB, which is at the sector average.
- Projected Value: After the listing, Future Land's interest in Future Land Holdings is expected to reach Rmb11.45bn or HK$14.3bn, significantly higher than its current HK$9.35bn market cap.
- Guaranteed Net Profit: Future Land has guaranteed a net profit of Rmb1.55bn for 2015, which will be compensated by Mr. Wang if not met.
- PE Valuation: On listing day, the PE valuation for 2015F is expected to be 10.8x, which is not considered demanding compared to its peers.
TMT Sector
- Key Highlights:
- Xiaomi's E-Finance: Xiaomi has launched online financial services through its smartphones, similar to Alibaba, Baidu, and Tencent.
- Tmall Partnerships: Tmall has partnered with nine multinational retailers to offer imported goods and logistics integration.
- Smartphone Sales Decline: China's smartphone sales declined in Q1 2015 due to a saturated market.
- Gaokaopai Acquisition: The Chinese education startup Gaokaopai has been acquired by TAL Education Group.
- Tianshi Yisheng Funding: The mobile maternity healthcare app Tianshi Yisheng secured RMB80 million in Series A funding.
Key Market Data
Equity Indices
| Index |
Price (12 May) |
Change |
% Change |
| Hang Seng Index |
27,407 |
-311 |
(1.1) |
| H-share Index |
13,973 |
-210 |
(1.5) |
| CSI 300 Index |
4,748 |
57 |
1.2 |
| Sh Composite Index |
15,066 |
121 |
0.8 |
| Sz Composite Index |
2,426 |
52 |
2.2 |
| Nikkei 225 |
19,625 |
4 |
0.0 |
| Korea KOSPI |
2,097 |
-1 |
(0.0) |
| Taiwan TWSE |
9,681 |
17 |
0.2 |
| India Sensex 30 |
26,877 |
-630 |
(2.3) |
| DJIA |
18,068 |
(37) |
(0.2) |
| S&P 500 |
2,099 |
(6) |
(0.3) |
| NASDAQ |
4,976 |
(17) |
(0.3) |
| UK FTSE 100 |
6,934 |
(96) |
(1.4) |
| Germany DAX |
11,472 |
(201) |
(1.7) |
| France CAC40 |
4,975 |
(53) |
(1.1) |
Commodity Prices
| Commodity |
Price (12 May) |
Change |
% Change |
| WTI Oil |
$60.8 |
$1.5 |
2.5 |
| Gold |
$1,194.2 |
$10.5 |
0.9 |
| Copper |
$6,440.0 |
$75.0 |
1.2 |
| Aluminum |
$1,895.5 |
$16.5 |
0.9 |
| CRB Futures |
231.1 |
2.8 |
1.2 |
| Baltic Dry Index |
589.0 |
11.0 |
1.9 |
Interest Rates and Bond Yields
| Indicator |
Value |
| HIBOR 3m |
0.39% |
| USD LIBOR 3m |
0.28% |
| US Treasury 3m Yield |
0.01% |
| US Treasury 10y Yield |
2.25% |
| China Treasury 2y Yield |
3.03% |
| China Treasury 10y Yield |
3.40% |
Shareholdings and Market Cap
| Metric |
Value |
| Ticker |
1030.HK |
| Price (12 May) |
HK$1.65 |
| 52W High |
HK$1.87 |
| 52W Low |
HK$0.62 |
| Market Cap (HK$mn) |
9,352 |
| Market Cap (US$mn) |
1,199 |
| Total Issued Shares (mn) |
5,668 |
| Average Turnover (HK$mn) |
24.1 |
Shareholding Structure
| Category |
Percentage |
| Wealth Zone HK |
72.3% |
| Free Float |
27.7% |
Peer Comparison Table
| Company |
Ticker |
Price (HK$) |
EPS 15F (%) |
EPS 16F (%) |
PER 15F |
PER 16F |
PBR 15F |
PBR 16F |
Dvd Yield 15F (%) |
Dvd Yield 16F (%) |
ROE 15F (%) |
ROE 16F (%) |
| AGILE PROPERTY |
3383.HK |
6.50 |
(20.8) |
2.9 |
5.4 |
5.2 |
0.5 |
0.5 |
5.5 |
5.6 |
10.1 |
9.7 |
| GREEN TOWN CHINA |
3900.HK |
10.38 |
62.7 |
1.9 |
5.3 |
5.2 |
0.6 |
0.6 |
3.7 |
3.8 |
12.3 |
11.2 |
| Guangzhou R&F Properties - H |
2777.HK |
9.67 |
5.2 |
11.5 |
4.5 |
4.0 |
0.5 |
0.5 |
4.2 |
5.9 |
12.8 |
12.6 |
| KWG Property Holding Ltd |
1813.HK |
7.88 |
(2.1) |
19.5 |
5.8 |
4.8 |
0.8 |
0.7 |
5.6 |
6.5 |
14.8 |
16.0 |
| Longfor Properties |
960.HK |
13.12 |
(13.6) |
12.4 |
7.9 |
7.1 |
1.1 |
1.0 |
2.7 |
3.1 |
15.2 |
15.1 |
| Shimao Property |
813.HK |
17.80 |
11.0 |
10.9 |
5.5 |
4.9 |
0.9 |
0.8 |
5.4 |
6.1 |
16.9 |
17.0 |
| Yu Zhou Properties |
1628.HK |
2.51 |
6.9 |
27.3 |
5.2 |
4.1 |
0.7 |
0.6 |
6.8 |
8.1 |
17.5 |
16.4 |
| Sunac China Holdings Ltd |
1918.HK |
9.52 |
42.8 |
15.5 |
5.6 |
4.8 |
1.2 |
1.0 |
2.9 |
3.4 |
22.8 |
22.4 |
| Future Land Development |
1030.HK |
1.65 |
19.4 |
16.3 |
6.1 |
5.3 |
0.6 |
0.5 |
4.2 |
4.5 |
12.1 |
10.7 |
| Average |
- |
- |
12.4 |
13.1 |
5.7 |
5.1 |
0.8 |
0.7 |
4.6 |
5.2 |
14.9 |
14.6 |
| Median |
- |
- |
6.9 |
12.4 |
5.5 |
4.9 |
0.7 |
0.6 |
4.2 |
5.6 |
14.8 |
15.1 |
Key Insights
- Future Land Development is expected to benefit significantly from its dual listing, with potential for revaluation due to its stake in the A-share listed company.
- The TMT sector witnessed several key developments, including Xiaomi's e-finance launch, Tmall's international partnerships, and new funding for healthcare apps.
- The equity indices across different regions showed mixed performance, with some declines and others showing slight increases.
- Commodity prices were generally stable, with minor increases in oil and metals.
- The interest rate and bond yield data reflected a low-interest environment, with some slight fluctuations in the short-term rates.
