20180904-招商证券_香港_-China_Property__Macro_uncertainties_hinder_re-rating_20页_3mb

报告摘要

China Property Industry Report Summary

Core Content

The China Property sector reported strong financial performance in the first half of 2018 (1H18), with key developers showing significant growth in core profit, revenue, and margin expansion. Despite these positive results, macroeconomic uncertainties, including the trade war and RMB fluctuations, continue to weigh on the sector, leading to a NEUTRAL rating. The report highlights the performance of specific developers and their outlook for the remainder of the year.

Main Points

1. Strong Financial Results

Core Profit Growth: 24 key developers reported an average of +78% YoY growth in core profit for 1H18, exceeding market expectations of +37%.
Revenue Growth: Revenue increased by +46% YoY, driven by the property market rally and market consolidation.
Margin Expansion: Gross margin expanded by 3.2ppts to 33.2%, and core margin expanded by 1.1ppts to 12.3%.

2. Sales Performance

Contracted Sales Growth: Contracted sales rose by +51% YoY to RMB2.6tn in 7M18, with market share increasing to 33.5%.
Sales Run Rate: Developers achieved a 55% run rate for 2018, suggesting a 29% YoY growth.
Top Performing Developers: Developers such as Jinmao, Aoyuan, and Future Land recorded sales growth of 65-188%.

3. Management Outlook

Positive on Sales and Margin: Management is generally optimistic about sales and margin performance for 2018-2019.
Cautious on Land Banking: There is a shift towards caution in land banking, with a focus on managing land reserves more carefully.
Sales Target Adjustments: Some developers, like Logan and Shenzhen Investment, raised their sales targets, indicating confidence in their launch pipelines.

4. Sector Performance and Valuation

Share Price Recovery: Share prices have not fully recovered from the recent correction.
Discount to NAV: The sector is currently trading at a 53% discount to NAV, indicating potential value.

5. Key Developers' Performance

Top Picks: Longfor and COLI are highlighted as top picks due to their recovery from the correction and strong performance.
Buy Ratings: Vanke, Evergrande, and Sunac are recommended as buys, with strong financial results and growth prospects.
Neutral Rating: Country Garden is given a neutral rating due to its strategy shift and the wait-and-see approach.

Key Information

Growth Drivers: Revenue growth and margin expansion were the main drivers of profit growth.
Land Banking Activity: Developers were active in land banking, with total land acquired reaching 298mn sqm and land cost reaching RMB1.1tn.
Land Reserve Changes: Evergrande is the only developer that offloaded more land than it replenished, reducing its total land reserve by 7mn sqm.
Financial Metrics: Net gearing increased to 80.5% in 1H18, while average finance costs rose slightly.

Summary Table

Developer	Core Profit YoY Growth	Revenue YoY Growth	Gross Margin (YoY %)	Core Margin (YoY %)	Net Gearing (%)
Vanke	39%	55.1%	3.3%	-1.1%	32%
Country Garden	80%	69.7%	4.5%	0.6%	24%
Evergrande	50%	59.8%	0.4%	-0.7%	103%
COLI	14%	1.6%	5.3%	2.4%	37%
Sunac	292%	215.3%	2.5%	2.8%	186%
Longfor	31%	45.9%	3.9%	-1.5%	46%

Risks and Outlook

Upside Risks: Resolution of trade war, rebound in the economy.
Downside Risks: Further tightening policies, economic recession.
Sector Rating: NEUTRAL due to macroeconomic uncertainties.
Investment Recommendation: Focus on quality names such as Vanke, Evergrande, COLI, and Longfor.

Figures and Charts

Figure 1: 24 key developers' core profit rose by 78% YoY in 1H18.
Figure 2: Revenue increased by 46% YoY.
Figure 3: Gross margin expanded by 3.2ppts to 33.2%.
Figure 4: Net gearing increased by 6.1ppts to 80.5%.
Figure 5: Share prices did not recover much from the recent correction.
Figure 6: Property sector is trading at a 53% discount to NAV.
Figure 7: 16 out of 24 developers beat market expectations.
Figure 8: Revenue growth for most developers exceeded historical performance.
Figure 9: Gross margin reached 33.2% in 1H18.
Figure 10: Core margin expanded to 12.3%.
Figure 11: Contracted sales grew by 51% YoY.
Figure 12: Market share increased to 33.5%.
Figure 13: Developers like Jinmao and Aoyuan recorded significant sales growth.
Figure 14: Land banking activity was active, with total land acquired at 298mn sqm.
Figure 15: Most developers remained in expansion mode, with a replenished/sold ratio of 1.7x.