20140415-DBS_Group-Ground_check__Lanzhou__Supply-led_demand_growth_17页_519kb
报告摘要
Lanzhou Property Market Summary: Supply-led Demand Growth
Core Content and Key Insights
Lanzhou's property market has experienced significant growth due to increased supply, particularly from the entry of national developers. This growth was driven by the local government's decision to allow construction along the hills, which had previously been under-supplied. The city's high population density and limited flat land have led to overcrowding in main districts, prompting demand for properties in newly developed hill areas.
The key developers in the market include COLI, Shimao, COGO, and Franshion, with Country Garden standing out due to its unique product offerings and high green ratio in a "desert" city. Country Garden's project in Lanzhou New City has already attracted substantial contracted sales and is expected to launch additional units in the future, potentially driving further growth.
Market Dynamics
- Population Density and Supply Constraints: Lanzhou is surrounded by hills, leading to high population density and a previously under-supplied property market. This has been a key driver for demand.
- Government Policy Change: In 2013, the local government allowed development along the hills, leading to a surge in supply and sales growth from Rmb 9.6bn in 2012 to Rmb 13.1bn in 2013.
- Demand Shift: As supply becomes available in the hill areas, demand is expected to shift from overcrowded main districts, leading to potential sales growth of up to Rmb 20bn in 2014.
- HPR Implementation: The Housing Purchase Restriction (HPR) policy was loosely implemented, allowing more homebuyers to participate in the market.
Developer Performance
| Developer | Saleable Resources 2013 (Rmb m) | Saleable Resources 2014 (Rmb m) | 2013 Actual (Rmb m) | 2014 Target (Rmb m) | ASP (Rmb/sm) | ASP Increase | Gross Margin Estimates | Showroom Traffic (no. of groups) |
|---|---|---|---|---|---|---|---|---|
| Evergrande Oasis | 776 | Phase 2: 2,000 | 730 | Phase 2: 2,000 | 6,850 | Slight increase | n.a. | nil primarily due to early in the morning |
| COGO The Arch | 2,250 | 200 | 2,050 | 200 | 7,800 | 8% | 26% | 5 |
| Country Garden Lanzhou New City | 5,000 | Phase 2*: 10,000 | 3,100 contracted so far | Phase 2*: 7,500 | 6,500 | 3% | 18% | 10 |
Valuation and Recommendations
| Company | Price (HK$) | Target Price (HK$) | Recommendation | Market Cap (HK$bn) | FY14F PE x | FY14F PE Yield % | FY15F PE x | ROE 14F % | Net Gearing 13A % | P/Bk x | NAV to NAV (HK$) |
|---|---|---|---|---|---|---|---|---|---|---|---|
| China Overseas | 20.90 | 29.84 | Buy | 171 | 7.6 | 6.2 | 24 | 18.9 | 1.6 | 1.6 | 26.1 |
| COGO | 5.43 | 10.50 | Buy | 12 | 3.6 | 2.8 | 2.0 | 26.5 | 1.1 | 12.4 | 56.4 |
| Franshion | 2.62 | 3.83 | Buy | 24 | 6.5 | 5.0 | 4.6 | 12.3 | 0.9 | 6.4 | 58.9 |
| Shimao | 17.26 | 25.83 | Buy | 60 | 6.0 | 5.0 | 5.7 | 18.0 | 1.1 | 28.8 | 40.1 |
PE Valuations (2007–2013)
| Company | 14-Apr Price (HK$) | Mkt Cap (HK$bn) | FY14F PE x | FY15F PE x | Avg PE x | PE Yield % | Trough 2007 | Peak 2008 | Trough 2009 | Peak 2009 | Trough 2010 | Peak 2010 | Trough 2011 | Peak 2011 | Trough 2012 | Peak 2012 | Trough 2013 | Peak 2013 |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| China Overseas | 20.90 | 170.8 | 7.6 | 6.2 | 11.2 | 12.2 | 7.6 | 6.2 | 9.8 | 37.8 | 10.7 | 8.9 | 12.9 | 25.3 | 10.8 | 17.2 | 6.6 | 12.2 |
| Country Garden | 3.54 | 65.3 | 5.2 | 4.2 | 16.2 | 11.4 | 5.2 | 4.2 | 3.6 | 49.4 | 5.2 | 4.2 | 5.2 | 20.1 | 10.8 | 16.8 | 5.2 | 11.5 |
| CR Land | 17.52 | 102.2 | 6.0 | 5.0 | 10.6 | 12.9 | 6.0 | 5.0 | 3.8 | 30.0 | 6.5 | 5.0 | 4.2 | 18.4 | 8.6 | 13.3 | 6.5 | 9.8 |
| Evergrande | 3.84 | 55.8 | 4.7 | 4.4 | 4.5 | 11.9 | 4.7 | 4.4 | n.a. | n.a. | n.a. | n.a. | n.a. | n.a. | 3.8 | 9.1 | 2.9 | 8.9 |
| Shimao Property | 17.26 | 59.9 | 6.0 | 5.0 | 10.6 | 12.9 | 6.0 | 5.0 | 3.8 | 30.0 | 6.5 | 5.0 | 4.2 | 18.4 | 8.6 | 13.3 | 6.5 | 9.8 |
Analysts
- Carol WU: +852 2863 8841 | carol_wu@hk.dbsvickers.com
- Danielle WANG CFA: +852 2820 4915 | danielle_wang@hk.dbsvickers.com
- Andy YEE: +852 2971 1773 | andy_yee@hk.dbsvickers.com
- Ken HE CFA: +86 21 6888 3375 | ken—he@hk.dbsvickers.com
Summary
The Lanzhou property market has seen a strong growth trend driven by increased supply, particularly from national developers. The city's geography and population density have historically constrained development, but policy changes in 2013 allowed for expansion along the hills, significantly boosting sales. Country Garden, in particular, has emerged as a key player with its unique product offering and high green ratio, which has attracted homebuyers.
Despite the growth, there are concerns about the sustainability of demand as supply continues to increase. Developers like Shimao and COGO are also showing promising performance, with potential for future growth. The market is expected to reach Rmb 20bn in sales this year, but the pace of growth may slow if supply outstrips demand.
Valuation metrics indicate that several companies are undervalued, with recommendations to buy for those with strong fundamentals and growth potential. The PE valuations show a historical trend of fluctuation, with current valuations appearing more attractive compared to previous peaks. The report highlights the importance of monitoring the market dynamics and the potential for continued growth in the hill areas.
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