20150702-大华继显-The_Only_SOE_Laggard_24页_598kb

报告摘要

GEMDALE PROPERTIES AND INVESTMENT (535 HK) Summary

Core Content

Gemdale Properties and Investment (GPI) is a leading real estate developer and operator in the Greater China region, operating independently under Gemdale Corporation, a major Chinese real estate company. The report highlights GPI's strong fundamentals, including robust earnings growth, a healthy balance sheet, and aggressive landbanking strategies in top-tier cities. It also notes that GPI is a laggard among SOE stocks but presents a compelling investment opportunity due to its significant discount to RNAV.

Main Points

Earnings Growth

2014 Contracted Sales: Rmb11.4 billion, up 170.3% yoy.
Tier-1 City Contribution: 52.6% of sales in 2014.
2015-17 Core Net Profit CAGR: Forecasted at 26.5%.
Saleable Resources: Expected to reach Rmb18 billion in 2015, with 40% brought forward from 2014.
Earnings Revision: Expected strong upward revision for 1H15 due to solid sales growth and low base in 1H14.

Balance Sheet

Net Cash Position: Rmb5 billion, providing strong liquidity.
Land Reserves: 4.8 million sqm in GFA terms, with 36.5% in tier-1 cities.
Landbanking Strategy: Focus on tier-1 and selected tier-2 cities with high population inflow.
Land Acquisitions: Six new land plots in Beijing, Shenzhen, Tianjin, Nanjing, Suzhou, and Dalian, with total GFA over 1.3 million sqm and land cost of Rmb6,008/sqm.

Valuation

Current Share Price: HK$0.56.
Target Price: HK$0.89, implying a 58.9% upside.
RNAV per Share (2015): HK$1.77.
Discount to RNAV: 68.4%, higher than the sector average of 34.8%.
Share Placements: Two placements in 2015, raising HK$2.85 billion.

Key Financials (Year to 31 Dec)

Metric	2013	2014	2015F	2016F	2017F
Net Turnover (HK$)	233	2,169	6,189	8,655	10,877
EBITDA (HK$)	1,412	1,066	1,915	2,680	3,286
Operating Profit (HK$)	1,360	1,018	1,867	2,633	3,238
Net Profit (rep./act.) (HK$)	1,042	361	659	933	1,148
Net Profit (adj.) (HK$)	114	170	793	1,058	1,269
EPS (Fen)	1.3	1.9	5.2	7.0	8.4
PE (x)	34.2	24.0	8.6	6.4	5.4
P/B (x)	0.8	0.8	1.0	0.9	0.8
EV/EBITDA (x)	3.4	4.5	2.5	1.8	1.5
Dividend Yield (%)	1.8	0.0	2.4	3.4	4.2
Net Margin (%)	48.9	7.8	12.8	12.2	11.7
Net Debt/(Cash) to Equity (%)	36.5	7.7	45.8	62.4	69.0
Interest Cover (x)	10.3	4.7	3.9	4.2	4.7
ROE (%)	22.6	7.6	11.5	13.5	14.5

Investment Highlights

Robust Earnings Growth: Expected due to strong sales growth and high margins.
Landbanking: Aggressive acquisition in top-tier cities, enhancing investment scale and profitability.
New Business Lines: Expansion into third-party commercial property management, which is expected to generate significant revenue in the next five years.
Market Position: GPI is a key platform for landbanking and has a strategic focus on core cities.

Industry Outlook

Sales Recovery: The top 25-30 cities are leading the recovery, with tier-1 cities showing the strongest growth (115.8% yoy in June).
Pricing Recovery: Early signs of pricing recovery due to loosening measures and credit easing.
Market Polarization: High inventory pressure persists in low-tier cities, while core cities remain strong.
Core Cities Theory: Around 42% of property sales in China are from 25 core cities, expected to rise to 45-50% in 2015.

Risk Factors

Market Volatility: Despite strong fundamentals, the property market remains volatile.
Regulatory Changes: Potential changes in real estate policies could impact sales and landbanking.
Economic Conditions: Macroeconomic conditions and interest rates could affect demand and financing.
Competition: Intense competition in core cities may impact market share.

Conclusion

GPI is positioned well for recovery in the Chinese property market, with strong earnings growth, a healthy balance sheet, and strategic landbanking in top-tier cities. The stock is undervalued compared to its RNAV, presenting a significant upside potential. The company's new business lines and focus on core cities support its growth strategy, making it an attractive investment opportunity.

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