20150818-DBS_Group-Slight_sales_pick-up_w-o-w_18页_645kb

China Property Weekly Digest Summary (Issue No. 138)

Core Content Overview

This report provides a detailed analysis of the property market in China, focusing on sales performance, new project launches, inventory levels, and share price movements across different cities and companies. It is dated 18 August 2015.

Key Market Trends

Weekly Sales Performance

• Overall GFA Sold: Increased by 4% week-over-week (w-o-w), but 11% higher year-over-year (y-o-y).
• ASP (Average Selling Price): Decreased by 1.5% w-o-w and 7.9% y-o-y.
• New Units Launched: Dropped by 5% w-o-w to 8.6k units, with a sell-through rate of 62%, down from 69% in the previous week.
• Inventory Level: Decreased slightly to 67 weeks (from 68 weeks), which is lower than 2014's average of 77 weeks.

Sales Performance by Tier

Tier I Cities

• Total GFA Sold: 965,000 sqm, up 7% w-o-w and 57% y-o-y.
• ASP: 25,392 HK$, up 3% w-o-w and 34% y-o-y.
• Key City Performances:
  • Beijing: GFA sold up 6% w-o-w and 6% y-o-y; ASP up 8% w-o-w and 26% y-o-y.
  • Shanghai: GFA sold up 9% w-o-w and 64% y-o-y; ASP up 1% w-o-w and 25% y-o-y.
  • Shenzhen: GFA sold down 5% w-o-w and up 81% y-o-y; ASP up 0% w-o-w and 81% y-o-y.
  • Guangzhou: GFA sold up 14% w-o-w and 50% y-o-y; ASP up 2% w-o-w and 4% y-o-y.

Tier II Cities

• Total GFA Sold: 3,499,000 sqm, down 10% w-o-w and up 35% y-o-y.
• ASP: 9,660 HK$, down 5% w-o-w and 11% y-o-y.
• Key City Performances:
  • Tianjin: GFA sold up 60% w-o-w and 148% y-o-y; ASP down 3% w-o-w and 5% y-o-y.
  • Hangzhou: GFA sold up 14% w-o-w and 22% y-o-y; ASP up 14% w-o-w and 10% y-o-y.
  • Chengdu: GFA sold up 0% w-o-w and 6% y-o-y; ASP up 0% w-o-w and 6% y-o-y.
  • Nanjing: GFA sold up -5% w-o-w and 86% y-o-y; ASP up -5% w-o-w and 33% y-o-y.

Tier III Cities

• Total GFA Sold: 1,458,000 sqm, up 12% w-o-w and 54% y-o-y.
• ASP: 5,721 HK$, down 1% w-o-w and 3% y-o-y.
• Key City Performances:
  • Dongguan: GFA sold up 26% w-o-w and 146% y-o-y; ASP up -4% w-o-w and 5% y-o-y.
  • Weifang: GFA sold up 9% w-o-w and n.a. y-o-y; ASP up 0% w-o-w and n.a. y-o-y.
  • Xuzhou: GFA sold up 34% w-o-w and 44% y-o-y; ASP up -3% w-o-w and -4% y-o-y.

Share Price Performance and Peer Valuations

• HSI (Hang Seng Index): 23,475.
• Valuation Comparison:
  • Large Cap:
    • China Overseas: Price HK$22.9, Market Cap HK$225.8bn, EPS growth 11%, PE 38.96, P/B 25.5.
    • Country Garden: Price HK$2.9, Market Cap HK$65.5bn, EPS growth 14%, PE 3.81, P/B 3.7.
    • CR Land: Price HK$19.68, Market Cap HK$136.4bn, EPS growth 11%, PE 31.30, P/B 27.0.
    • China Vanke: Price HK$18.12, Market Cap HK$200.0bn, EPS growth 17%, PE 23.41, P/B 22.4.
    • Evergrande: Price HK$4.89, Market Cap HK$71.0bn, EPS growth 14%, PE 3.81, P/B 9.4.
    • Shimao Property: Price HK$12.46, Market Cap HK$43.3bn, EPS growth 9%, PE 25.16, P/B 28.5.
    • Yuexiu Property: Price HK$1.41, Market Cap HK$17.5bn, EPS growth 18%, PE 1.67, P/B 3.2.
  • Mid Cap:
    • Agile Property: Price HK$4.16, Market Cap HK$16.3bn, EPS growth 7.5%, PE 5.87, P/B 16.9.
    • COGO: Price HK$2.96, Market Cap HK$6.8bn, EPS growth 17%, PE 6.53, P/B 10.1.
    • Poly (Hong Kong): Price HK$2.66, Market Cap HK$9.7bn, EPS growth 9.2%, PE 2.28, P/B 4.5.
  • Small Cap:
    • BJ Cap Land: Price HK$3.61, Market Cap HK$7.3bn, EPS growth 1.1%, PE 2.28, P/B 4.5.
    • C C Land: Price HK$2.03, Market Cap HK$5.3bn, EPS growth 1.1%, PE 2.28, P/B 4.5.

Key Insights

• Sales Trends: The overall property market showed a slight sales increase w-o-w, but the sell-through rate declined slightly, indicating a cooling trend in the market.
• Inventory Trends: Inventory levels have decreased, suggesting a tighter market, although still lower than the 2014 average.
• Price Trends: ASPs have shown mixed performance across cities, with some seeing significant increases and others declines.
• Share Price Performance: There is a notable disparity in share price movements and valuations between large-cap, mid-cap, and small-cap companies. Large-cap companies generally show better performance and higher valuations.
• Market Outlook: The report highlights the importance of monitoring both sales performance and inventory levels to gauge market health and future trends.

Conclusion

The property market in China experienced a slight sales pick-up in the first three weeks of August 2015, with overall GFA sold up 4% w-o-w and 11% y-o-y. Inventory levels decreased slightly to 67 weeks, lower than the 2014 average of 77 weeks. Sales and ASPs varied significantly across Tier I, II, and III cities, with Tier I showing the most robust performance. Share prices and valuations reflect a mix of growth and stability, with large-cap companies generally performing better. The report underscores the need for continued monitoring of market dynamics to understand the evolving landscape.