20160602-招商证券_香港_-China_Property_Sector_2016_Revolution_in_2015-17_41页_1mb

报告摘要

China Property Sector 2016 Summary

Core Content

The China property sector is undergoing a significant transformation from 2015 to 2017, marked by increased M&A activity, privatization, and urban redevelopment. This shift is driven by heightened competition, government policies, and the need for developers to optimize their asset portfolios. The sector is expected to benefit from ongoing quantitative easing in the property market, with home prices projected to rise by 7% in 2016, supported by lower down payment requirements, extended mortgage repayment periods, and a more favorable interest rate environment.

Main Points

Market Outlook

Home Price Growth: Expected to grow by 7% YoY in 2016, up from 20% in 2015, due to increased mortgage availability and undersupply in Tier-1 and Tier-2 cities.
Inventory Turnover: Projected to decline to 10-11 months, indicating a tighter market.
Sales and Earnings Growth: Developers are expected to see contracted sales growth of +9% YoY and earnings growth of +15% YoY in 2016, with an anticipated increase in 2017.

Mergers and Acquisitions

Drivers: Strong competition and government SOE reform initiatives.
Key Players: Large developers like COLI and CR Land, with significant cash reserves, are expected to be active in M&A. These companies are also involved in urban redevelopment projects.
Asset Sellers: Mid-sized developers, especially those trading at a discount to NAV and P/B, are likely to be acquisition targets or consider privatization and share buybacks.

Privatization and Restructuring

Discounts: Mid-sized developers are trading at over 60% discount to NAV and below 0.5x P/B.
Examples: New World China and Wanda have initiated privatization processes, with Wanda offering at HK$52.8 per share.
Implications: Expected to see more privatization, share buybacks, A-share listings, and non-core asset disposals.

Urban Redevelopment

Rising Land Costs: Drive the need for urban redevelopment projects, which are seen as high-margin and fast-selling.
Key Projects: One Blossom Cove and R&F Dongshan Xintiandi are examples of successful urban redevelopment projects.
Advantages: Large SOEs have better access to resources and are better positioned to take advantage of redevelopment opportunities.

Key Information

Investment Recommendations

Top Picks: COLI (688 HK), CR Land (1109 HK), and CIFI (884 HK) are highlighted as top investment opportunities due to their strong financial positions and potential for growth.
Other Recommendations: Shimao (813 HK), COGO (81 HK), and Agile (3383 HK) are also recommended for their potential in asset restructuring and urban redevelopment.

Valuation Insights

Sector Discount: The sector is currently trading at a 40% discount to 1-year forward NAV, which is 1SD below the 7-year mean.
P/B and P/E: HK-listed developers trade at 0.6x P/B, while A-share developers trade at 1.8x P/B, indicating that HK-listed companies are undervalued.
Yield: Some developers, like Yuzhou and Shimao, offer attractive dividend yields.

Policy Changes

Credit Policies: Lower down payment requirements, extended mortgage repayment periods, and increased mortgage asset securitization are expected to drive growth.
Urban Registration Reforms: Aimed at increasing housing demand and improving affordability.
Housing Provident Fund: Expected to be expanded to support more buyers.

Market Dynamics

Sales Trends: Sales are expected to stabilize in Tier-1 and Tier-2 cities, while Tier-3 and Tier-4 cities may see a decline.
Supply and Demand: Inventory turnover is expected to decrease, and supply is likely to be under in major cities, supporting price growth.

Company Financials

Contracted Sales

COLI: +18% YoY
CR Land: +24% YoY
Country Garden: +20% YoY
Evergrande: +19% YoY
Vanke: +11% YoY
Shimao: 0% YoY
CIFI Holdings: +12% YoY
Yuzhou: +15% YoY
COGO: +7% YoY

Profit Growth

Core Net Profit: Expected to grow by 15% in 2016E, with a potential 10% growth in HK$ terms.
GPM: Expected to slightly rebound in 2016-2017E, with price increases offsetting higher land costs.

Risk & Opportunity

Opportunities: Increased mortgage availability, urban redevelopment, and asset restructuring.
Risks: Potential shrinkage of pent-up demand, especially in Tier-3 and Tier-4 cities.

Summary Table

Company	Ticker	Rating	Current Price (HK$)	Target Price (HK$)	Upside/Downside	NAV Discount	FY15 P/E	FY16E P/E	FY15 P/B	FY16E P/B	Yield (%)	Net Gearing (%)
COLI	688 HK	Buy	23.35	28.20	21%	25%	8.2	7.4	1.1	1.0	2.7%	7%
CR Land	1109 HK	Buy	18.58	23.80	28%	39%	9.0	7.9	1.0	1.0	2.5%	24%
CIFI	884 HK	Buy	1.83	2.00	9%	59%	4.4	4.1	0.7	0.7	8.5%	59%
Shimao Prop	813 HK	Buy	9.84	14.00	42%	66%	4.6	4.0	0.5	0.5	9.1%	58%
COGO	81 HK	Buy	2.38	3.30	39%	70%	6.3	4.1	0.4	0.4	2.4%	48%
Agile Property	3383 HK	Buy	3.83	4.60	20%	66%	5.1	4.7	0.4	0.4	4.5%	84%
Yuzhou	1628 HK	Buy	2.24	2.60	16%	66%	4.7	4.3	0.7	0.7	8.6%	79%
CM Land	978 HK	Buy	1.15	1.50	30%	52%	14.1	6.0	0.8	0.8	1.3%	69%
Yuexiu Property	123 HK	Buy	0.99	1.39	40%	78%	8.9	8.6	0.4	0.4	3.6%	73%
Greentown	3900 HK	Neutral	5.45	6.70	23%	67%	7.7	4.4	0.4	0.4	4.6%	88%
Country Garden	2007 HK	Neutral	3.11	3.00	-4%	39%	5.8	5.6	0.8	0.8	5.5%	88%
KWG Property	1813 HK	n.a.	4.80	n.a.	n.a.	n.a.	4.6	n.a.	n.a.	n.a.	n.a.	69%

Conclusion

The property sector in China is at a pivotal stage, with a focus on M&A, privatization, and urban redevelopment. The sector is undervalued, offering significant upside potential. Key players such as COLI and CR Land are well-positioned to benefit from these trends, while smaller developers may see more opportunities for restructuring and asset sales. The market is expected to remain positive, supported by favorable credit policies and a tightening supply-demand balance in major cities.

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