20160705-DBS_Group-China_Property_Weekly_Digest_20页_720kb

China Property Weekly Digest Summary (Issue No. 181)

Core Content Overview

This report provides a detailed analysis of the property market performance in China, focusing on sales volume, inventory levels, and share price movements across Tier I, II, and III cities, as well as valuations of key property developers.

Main Points

Sales Performance

• Tier I/II/III Cities:

  • Sales volume increased by +11% / +8% / -8% week-over-week (w-o-w).
  • Overall sales volume rose by 3% w-o-w.
  • The sell-through rate improved to 82% (up from 80% the previous week).
  • Sales volume in the recent five weeks (ended 3-July) was 3% higher than the average of the past four weeks (ended 29-May).
  • Year-to-date (YTD) average selling price (ASP) was 4.1% higher than 2015's average.
  • YTD sales volume in the first 27 weeks of 2016 was 35% higher than 2015 and 20% higher than 2014.

• Inventory Level:

  • Inventory level at the end of the last week was flat w-o-w at 51 weeks, which is better than 2015's average of 64 weeks.

Weekly Sales Performance by Tier

Tier I Cities

• Total GFA sold: 1,252,000 sqm, up 11% w-o-w and -17% y-o-y.
• Average ASP: 35,285 HKD/sqm, up 3% w-o-w and 30% y-o-y.
• Key City Performance:
  • Beijing: GFA sold 239,000 sqm, down 13% w-o-w and 37% y-o-y.
  • Shanghai: GFA sold 563,000 sqm, up 17% w-o-w and -2% y-o-y.
  • Shenzhen: GFA sold 86,000 sqm, up 18% w-o-w and -52% y-o-y.
  • Guangzhou: GFA sold 364,000 sqm, up 24% w-o-w and 23% y-o-y.

Tier II Cities

• Total GFA sold: 5,647,000 sqm, up 8% w-o-w and 35% y-o-y.
• Average ASP: 12,090 HKD/sqm, up 3% w-o-w and -1% y-o-y.
• Key City Performance:
  • Tianjin: GFA sold 649,000 sqm, up 42% w-o-w and 103% y-o-y.
  • Hangzhou: GFA sold 235,000 sqm, up 15% w-o-w and 29% y-o-y.
  • Nanjing: GFA sold 528,000 sqm, up 100% w-o-w and 98% y-o-y.
  • Chongqing: GFA sold 578,000 sqm, up 32% w-o-w and 7% y-o-y.
  • Wuhan: GFA sold 706,000 sqm, up -8% w-o-w and 48% y-o-y.

Tier III Cities

• Total GFA sold: 1,009,000 sqm, down 8% w-o-w and up 7% y-o-y.
• Average ASP: 5,452 HKD/sqm, up 4% w-o-w and 0% y-o-y.
• Key City Performance:
  • Xuzhou: GFA sold 325,000 sqm, down -23% w-o-w and up 27% y-o-y.
  • Shantou: GFA sold 24,000 sqm, up 57% w-o-w and down -58% y-o-y.
  • Bengbu: GFA sold 64,000 sqm, up -5% w-o-w and up 74% y-o-y.
  • Zhaoqing: GFA sold 44,000 sqm, down -4% w-o-w and up 1% y-o-y.

Share Price Performance and Peer Valuations

• YTD Share Price Performance: The report includes a chart showing the year-to-date share price performance.

• Valuation Comparison:

  • Large Cap Developers:
    • China Overseas: Price 688 HK, Market Value 24.9 bn, Recommendation: BUY.
    • Country Garden: Price 2007 HK, Market Value 3.28 bn, Recommendation: BUY.
    • CR Land: Price 1109 HK, Market Value 18.22 bn, Recommendation: BUY.
    • China Vanke H: Price 2202 HK, Market Value 16.42 bn, Recommendation: HOLD.
    • Dalian Wanda H: Price 3699 HK, Market Value 46.5 bn, Recommendation: NR.
    • Evergrande: Price 3333 HK, Market Value 4.84 bn, Recommendation: HOLD.
    • Longfor: Price 960 HK, Market Value 10.2 bn, Recommendation: NR.
    • Shimao Property: Price 813 HK, Market Value 9.95 bn, Recommendation: HOLD.
    • Yanlord Land: Price YLLG SP, Market Value 1.13 bn, Recommendation: BUY.
    • Yuexiu Property: Price 123 HK, Market Value 0.95 bn, Recommendation: HOLD.
  • Mid Cap Developers:
    • BJ Cap Land H: Price 2868 HK, Market Value 2.86 bn, Recommendation: NR.
    • BJ North Star H: Price 588 HK, Market Value 2.37 bn, Recommendation: NR.
    • C C Land: Price 1224 HK, Market Value 2.04 bn, Recommendation: Hold.
    • Central China: Price 832 HK, Market Value 1.48 bn, Recommendation: BUY.
    • China SCE: Price 1966 HK, Market Value 1.69 bn, Recommendation: NR.
    • CIFI Holdings: Price 884 HK, Market Value 1.92 bn, Recommendation: NR.
    • First Sponsor: Price FSG SP, Market Value 1.2 bn, Recommendation: Buy.
    • Glorious Property: Price 845 HK, Market Value 0.69 bn, Recommendation: NR.
    • Hydoo Int'l: Price 1396 HK, Market Value 0.94 bn, Recommendation: NR.
    • Kaisa Group: Price 1638 HK, Market Value 1.56 bn, Recommendation: NR.
    • Lai Fung: Price 1125 HK, Market Value 0.123 bn, Recommendation: NR.
    • Minmetals Land: Price 230 HK, Market Value 0.91 bn, Recommendation: NR.
    • Powerlong: Price 1238 HK, Market Value 1.59 bn, Recommendation: NR.
    • Renhe Commercial: Price 1387 HK, Market Value 0.202 bn, Recommendation: NR.
    • Road King: Price 1098 HK, Market Value 6.09 bn, Recommendation: NR.

• Average Valuation Metrics:

  • PE Ratio: 20 (Large Cap), 21 (Mid Cap), 21 (Small Cap).
  • Yield: 8.7 (Large Cap), 7.1 (Mid Cap), 4.0 (Small Cap).
  • ROE: 8.5 (Large Cap), 9.3 (Mid Cap), 8.5 (Small Cap).
  • P/BK Ratio: 4.6 (Large Cap), 4.6 (Mid Cap), 4.6 (Small Cap).

Key Information

• The property market is showing signs of recovery, particularly in Tier I and Tier II cities.
• Inventory levels have improved, with the average number of weeks to digest inventory at 51 weeks, better than the 64 weeks in 2015.
• Sales volume has increased significantly in the first 27 weeks of 2016 compared to previous years.
• There is a mix of buy, hold, and no recommendation (NR) for different developers based on their performance and valuation metrics.
• The report highlights the importance of monitoring ASP trends and inventory levels to gauge market health.