20200402-尚乘集团-建业地产-00832.HK-Reaping_in_the_Harvest_and_More_is_to_Come_3页_1mb

报告摘要

Central China Real Estate Limited (0832.HK) Summary

Core Content

Central China Real Estate Limited (CCRE) is a real estate developer that has demonstrated strong performance and promising growth prospects. The company is currently rated as a Buy by AMTD Equity Research, with a target price of HK$6.00, offering a 50% upside from the current share price of HK$4.00 as of 1 April 2020.

Key Highlights

Strong 2019 Results: CCRE reported a 150% YoY increase in core net profit to RMB1.96bn, beating consensus estimates by 26%. This was driven by higher revenues and better gross profit margins.
Revenue Growth: 2019 revenues reached RMB30.8bn, 12% above estimates, with a 108% YoY growth. Revenue is expected to grow at 30% CAGR for 2020-2021E, reaching RMB37.1bn (2020E) and RMB44.5bn (2021E).
Dividend Yield: The stock offers a 11.8% dividend yield, supported by strong positive cash flows and a net debt to equity ratio of 6% (down from 18% in 1H19), one of the lowest in the industry.
Contracted Sales: In Q1 2020, contracted sales reached ~RMB11bn, with March sales alone at RMB7.2bn, nearly doubling the first two months' total. This suggests the company is on track to meet its RMB80bn contracted sales target for 2020.
Valuation: The stock trades at 4.0x 2020E P/E, slightly below the industry average of 4.2x, indicating attractive valuations. The P/BV ratio is expected to decline to 0.8x by 2021E, while dividend yield is projected to remain stable at 10.6%-12.2%.
ROE and ROA: ROE is expected to rise from 20.1% (2019) to 25.2% (2021E), while ROA is projected to increase from 1.4% (2019) to 1.7% (2021E), reflecting improved profitability.
Financial Health: CCRE maintains a low net debt to equity ratio (6% with restricted cash, 64% without), and total assets to equity remained stable at 11.4x (1H19: 11.2x).

Key Forecasts (RMB m)

Metric	2018	2019	2020E	2021E
Revenue	14,783	30,767	37,131	44,557
YoY %	6.5%	108.1%	20.7%	20.0%
Core Net Profit	784	1,957	2,443	3,294
YoY %	21.2%	149.7%	24.8%	34.8%
Gross Margin	34.4%	26.0%	24.0%	24.0%
Core Net Margin	6.4%	5.3%	5.7%	-
Net Debt to Equity (w/ RC)	6%	18%	31%	51%
Net Debt to Equity (w/o RC)	64%	61%	60%	-
EPS	0.30	0.72	0.89	1.21
DPS	0.19	0.43	0.38	0.44
BPS	3.39	3.56	3.97	4.73

Valuation Table

Metric	2018	2019	2020E	2021E
P/E	12.0	5.0	4.0	3.0
P/BV	1.1	1.0	0.9	0.8
Dividend Yield	5.3%	11.8%	10.6%	12.2%
ROE	8.9%	20.1%	22.3%	25.2%
ROA	0.8%	1.4%	1.5%	1.7%

Key Risks

Policy Uncertainty: Lack of supportive policy easing measures in Henan Province may lead to weaker-than-expected contracted sales.
Construction Delays: Potential delays in construction could affect revenue recognition and project timelines.

Analyst Information

Analyst: Jacky Chan
Contact: +852 3163 3323 | jacky.chan@amtdgroup.com
Associate: Karen Huang
Contact: +852 3163 3376 | karen.huang@amtdgroup.com

Important Disclosures

AMTD Global Markets Limited has an investment banking relationship with CCRE within the past 12 months.
The research report is confidential and not to be reproduced or redistributed without prior written consent.
AMTD does not act as an adviser and accepts no fiduciary responsibility for the financial or other consequences of relying on the report.
The report is based on reliable sources but does not guarantee completeness or accuracy.
The target price is based on a 6.0x 2020E P/E multiple.