20130822-DBS_Group-Multiple_funding_channels_to_fuel_growth_13页_284kb
报告摘要
Yuexiu Property Summary
Core Content
Yuexiu Property is a property developer based in Hong Kong, with a focus on real estate holding and development. The report highlights its financial performance, growth strategy, and valuation metrics as of 22 August 2013.
Main Points
Sales and Performance
- Revised FY13 sales target is Rmb14.5bn, representing an 18% increase from FY12.
- 7M13 sales reached Rmb10.2bn, which is 70% of the revised target.
- 1H13 contracted sales were Rmb8.6bn, or 59% of the revised target.
- Sales-through rate in 1H13 was 60%, and it is expected to be 30% in 2H13 to achieve the full-year target.
- Revenue grew by 25% y-o-y to Rmb6bn, driven by an 86.7% increase in GFA booked, while ASP dropped by 30%.
- Core earnings were Rmb770m in 1H13, slightly down by 3% from 1H12.
Financials
- Gross margin in 1H13 was 41%, down from 56% in 1H12 and 48% in FY12.
- Net gearing ratio increased to 55% in 1H13 from 47% at the end of FY12.
- Cash level was Rmb10.7bn, up 16% from end-FY12.
- Net debt ratio increased to 55% due to land acquisitions and higher construction pace.
- Yuexiu plans to maintain net gearing below 60%.
Dividend and Profitability
- Interim dividend of HK$0.049 was declared in 1H13, up 17% from HK$0.042.
- Dividend payout ratio was 16%, down from 23% in 1H12.
- Core net profit was Rmb770m, slightly lower than Rmb797m in 1H12.
- Pretax profit was Rmb3,906m in 1H13, up 24% from Rmb3,153m in 1H12.
Land Acquisitions and Funding
- Yuexiu acquired 1.1m sm of land for Rmb4.8bn in 7M13, with Rmb4.4bn to be paid in 2013.
- It plans to leverage a real estate fund (initial amount Rmb10bn) to acquire land in 2H13, with an ownership split of 20:80.
- Yuexiu can exercise a call option to buy the remaining 80% stake in the projects.
- Land acquisition pace in 2H13 may slow to maintain acceptable net gearing.
Valuation and Outlook
Valuation Metrics
- Current share price is HK$2.12, trading at a 56% discount to NAV estimate.
- P/BV is 0.7x, below historical average of 0.7x.
- FY14F PE is 6.8x, lower than historical average of 7.9x.
- Net debt/equity is 0.5x, down from 0.6x in 1H13.
- ROAE is 11.7%, up from 7.4% in FY12.
- Net Dividend Yield is 4.6%, up from 4.3% in 1H12.
Price Target and Recommendations
- Price target was lowered to HK$2.90 from HK$3.07.
- BUY recommendation is maintained due to undemanding valuations and decent presales outlook.
- Earnings growth is expected to be 37.3% in 2013 and 15.3% in 2014.
Key Projects
- Fortune World Plaza was officially opened in mid-August with a contracted occupancy rate of nearly 93% and average monthly rental rate of Rmb150/sm.
- Unrecognised revenue amounted to Rmb14.8bn, with Rmb7.2bn expected to be recognized in 2H13.
Comparison with Peers
Tier 1 Players
| Company | Price (HK$) | Market Cap (HK$bn) | 13F PE | 14F PE | EPS Growth (%) | PE (2013) | PE (2014) | Dividend Yield (%) | P/BV | Net Debt/Equity | ROE (%) | Net Gearing (%) | Discount to NAV (%) |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| China Overseas* | 688 | 23.15 | 66.5 | 9.7 | 26.12 | 4 | 13 | 9.7 | 19.8 | 20.5 | 1.8 | 2.0 | 20.5 |
| Country Garden* | 2007 | 4.73 | 14.4 | 8.8 | 4.85 | 12 | 30 | 8.8 | 21.8 | 51.6 | 3.7 | 4.2 | 51.6 |
| CR Land* | 1109 | 22.05 | 29.6 | 14.4 | 24.32 | (16) | 30 | 14.4 | 14.5 | 40.5 | 1.5 | 1.7 | 40.5 |
| Evergrande* | 3333 | 3.22 | 21.9 | 5.5 | 4.66 | (22) | 25 | 5.5 | 18.3 | 84.2 | 0.0 | 4.6 | 56.1 |
| Longfor | 960 | 13.06 | 10.2 | 9.0 | n.a. | (5) | 18 | 9.0 | 18.2 | 43.7 | 1.9 | 2.1 | 52.0 |
| Shimao Property* | 813 | 18.76 | 17.7 | 9.6 | 20.12 | (5) | 30 | 9.6 | 16.8 | 55.9 | 2.9 | 3.0 | 34.8 |
| Average | - | - | - | - | - | (5) | 24 | 9.5 | 18.2 | 49.4 | 2.0 | 2.9 | 50.7~ |
Tier 2 Players
| Company | Price (HK$) | Market Cap (HK$bn) | 13F PE | 14F PE | EPS Growth (%) | PE (2013) | PE (2014) | Dividend Yield (%) | P/BV | Net Debt/Equity | ROE (%) | Net Gearing (%) | Discount to NAV (%) |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Agile Property* | 3383 | 8.18 | 9.9 | 5.5 | 11.37 | 9.5 | 7.6 | 5.8 | 13.0 | 66.4 | 4.8 | 4.1 | 26.1 |
| COGO* | 81 | 9.99 | 5.8 | 8.3 | 12.00 | 6.4 | 6.8 | 8.8 | 21.8 | 51.6 | 3.7 | 4.2 | 51.6 |
| Franshion* | 817 | 2.72 | 1.9 | 8.9 | 3.40 | 5 | 7.0 | 8.9 | 11.9 | 42.9 | 2.6 | 3.4 | 25.1 |
| Greentown | 3900 | 15.26 | 6.4 | 4.8 | n.a. | 1 | 1.9 | 4.8 | 16.8 | 49.0 | 1.9 | 2.1 | 43.7 |
| Guangzhou R&F | 2777 | 12.52 | 11.3 | 5.8 | n.a. | 1.9 | 2.1 | 5.8 | 14.5 | 40.5 | 6.1 | 6.4 | 35.7 |
| Hopson Dev | 754 | 10.06 | 2.8 | 8.3 | n.a. | 1.0 | 1.8 | 8.3 | 18.3 | 69.3 | 0.0 | 4.6 | 63.5 |
| KWG Property | 1813 | 5.12 | 4.1 | 4.9 | n.a. | 2.9 | 3.0 | 4.1 | 15.0 | 63.5 | 3.7 | 4.8 | 55.6 |
| Poly (HK) | 119 | 4.71 | 8.6 | 6.3 | n.a. | 10.0 | 19.6 | 6.3 | 10.8 | 64.1 | 4.6 | 4.6 | 65.4 |
| Shui On Land* | 272 | 2.40 | 4.5 | 13.2 | 2.70 | 4.8 | 4.1 | 4.5 | 13.0 | 66.4 | 1.9 | 2.1 | 52.7 |
| Sino-Ocean Land* | 3377 | 4.42 | 4.4 | 8.6 | 5.11 | 1.1 | 1.3 | 4.4 | 14.5 | 63.5 | 2.9 | 3.0 | 56.7 |
| Soho China* | 410 | 6.56 | 5.6 | 7.6 | 6.17 | 4.8 | 4.1 | 5.6 | 7.3 | 60.0 | 1.9 | 2.1 | 64.1 |
| Sunac China | 1918 | 5.42 | 11.9 | 3.8 | n.a. | 3.8 | 2.8 | 11.9 | 10.2 | 78.9 | 1.8 | 2.7 | 56.3 |
| Yanlord Land**^ | T:Z25 | 1.21 | 2.3 | 9.3 | 2.70 | 3.8 | 2.0 | 2.3 | 10.2 | 35.7 | 1.6 | 1.1 | 51.2 |
| Yuexiu Property* | 123 | 2.12 | 5.1 | 9.3 | 2.90 | 32 | 37 | 9.3 | 0.7 | 47.0 | 4.6 | 4.3 | 56.1 |
| Average | - | - | - | - | - | 17.1 | 18.2 | 7.5 | 18.2 | 55.5 | 2.6 | 3.2 | 50.7~ |
Conclusion
Yuexiu Property is positioned for growth through multiple funding channels, including the newly established real estate fund. Despite a decline in gross margins, its sales performance and presales outlook are positive, supporting the BUY recommendation. The company's current valuation is considered undemanding, with a significant discount to its NAV. However, there are concerns regarding the balance of interests between Yuexiu and the fund, and the pace of land acquisitions in 2H13.
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