20151130-DBS_Group-华南城-01668.HK-Awaiting_sales_pick-up_11页_274kb_274kb
报告摘要
DBS Group Research Summary: China South City (CSC)
Core Content
This document provides a detailed research analysis on China South City (CSC), a leading developer and operator of integrated logistics and trade centres in China. The report outlines the company's financial performance, valuation metrics, and investment outlook as of 30 November 2015.
Investment Recommendation
- Current Recommendation: HOLD (Downgraded from BUY)
- Price Target: HK$1.94 (10% upside from last traded price of HK$1.77)
- Reason for Downgrade: Weak sales outlook and slower-than-expected performance in the first half of FY16
Financial Highlights
- Contracted Sales (1H15/16): HK$3,796m (down 44% y-o-y)
- GFA Delivered (1H15/16): 170,400 sqm (down 69% y-o-y)
- Revenue (1H15/16): HK$2,153m (down 58% y-o-y)
- Core Earnings (1H15/16): HK$198m (down 78% y-o-y)
- Net Profit (1H15/16): HK$749m (down 42% y-o-y)
- EPS (1H15/16): HK$0.09 (down 81.5% y-o-y)
- Net Debt Ratio (1H15/16): 85.7% (up 20 ppts from March)
- Cash Level (1H15/16): HK$11,548m (up 33% from March)
Valuation Metrics
- PE (1H15/16): 13.5x
- EV/EBITDA (1H15/16): 7.8x
- P/Book Value (1H15/16): 0.5x
- NAV Discount: 50% (CSC is trading at a discount to NAV)
- Earnings Rev (1H15/16): 66%
- Dividend Yield (1H15/16): 6.9%
Key Risks
- Macroeconomic Risks: A hard landing in China's economy could negatively impact the trade centre market.
- Municipal Risks: Sales depend on local government relocation progress of existing wholesale malls.
- Earnings Risks: Property development contributes the majority of revenue and earnings, making it vulnerable to sales fluctuations.
Business Overview
- Principal Business: Property development and management, with extensions into e-commerce, warehouses, and outlet malls.
- Land Bank: 29m sqm in 8 Tier I/II cities, and 49m sqm GFA under a framework agreement with local governments.
- Strategic Initiatives: Strategic cooperation with Tencent for e-commerce platform development, aiming to integrate with Tencent's digital ecosystem.
Investment Thesis
- Property Sales Segment: Valued at 6.4x FY15/16 PE, benchmarked against mid-cap averages in the China property sector.
- Warehouse Investment Properties: Discounted at 40% NAV, similar to GLP's 10% discount.
- Other Investment Properties: Discounted at 59% NAV, benchmarked to mid-cap Chinese developers.
- E-Commerce Segment: Valued at 20x FY15E PE, benchmarked to HK-listed e-commerce players.
Performance Analysis
- Gross Margin (1H15/16): 51% (up 4 ppts)
- Core Net Profit Margin (1H15/16): 9% (down 8 ppts)
- SG&A as % of Top Line: 44% (up 29 ppts)
- SG&A as % of Contracted Sales: 25% (up 14 ppts)
- Effective Tax Rate (1H15/16): 41% (unchanged)
Shareholder Information
- Issued Capital: 7,999 million shares
- Market Cap: HK$14,159m / US$1,827m
- Major Shareholders:
- Mr. Cheng Chung Hing, ED & Co-chairman: 30.6%
- Tencent Holdings: 11.6%
- Leung Moon Lam: 5.7%
- Free Float: Not specified
Peer Comparison (China Property)
| Company Name | Code | Price (HK$) | Target Price (HK$) | Recommendation | EPS Growth (15F/16F) | PE (15F) | PE (16F) | PE Yield (15F) | PE Yield (16F) | Yield (15F) | Yield (16F) | P/B (15F) | ROE (15F) | Net Gearing (15F) | NAV to NAV % |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| China Overseas* | 688 HK | 25.7 | 2.9 | Buy | 38.96 | (8) | 7 | 8.2 | 7.7 | 2.5 | 2.6 | 19.7 | 13.5 | 15.5 | 50.1 |
| Country Garden* | 2007 HK | 2.91 | 3.6 | Buy | 4.86 | (20) | 7 | 5.5 | 5.1 | 3.7 | 4.3 | 19.7 | 13.5 | 11.0 | 50.1 |
| CR Land* | 1109 HK | 20.85 | 2.9 | Buy | 24.98 | (28) | 16 | 11.4 | 9.9 | 2.4 | 2.7 | 19.7 | 13.5 | 13.0 | 50.1 |
| China Vanke 'H' | 2202 HK | 19.32 | 2.9 | Buy | 23.41 | 8 | 17 | 10.2 | 8.8 | 3.4 | 4.0 | 19.7 | 13.5 | 15.8 | 50.1 |
| Dalian Wanda 'H' | 3699 HK | 46.05 | NR | NR | n.a. | (42) | 24 | 9.6 | 7.8 | 2.9 | 3.6 | 19.7 | 13.5 | 73.7 | 50.1 |
| Evergrande* | 3333 HK | 6.11 | 1.9 | Hold | 5.35 | (50) | 37 | 11.8 | 8.6 | 2.1 | 2.9 | 19.7 | 13.5 | 85.8 | 50.1 |
| Longfor | 960 HK | 10.62 | NR | NR | n.a. | (19) | 8 | 7.1 | 6.3 | 2.9 | 3.7 | 19.7 | 13.5 | 61.1 | 50.1 |
| China Jinmao Hldgs* | 817 HK | 2.35 | 1.9 | Buy | 2.97 | (47) | 24 | 8.2 | 6.6 | 4.3 | 5.2 | 19.7 | 13.5 | 49.5 | 50.1 |
| Shui On Land* | 272 HK | 2.14 | 1.9 | Hold | 1.49 | (41) | 16 | 7.9 | 6.7 | 5.3 | 5.9 | 19.7 | 13.5 | 65.5 | 50.1 |
| Sino-Ocean Land* | 3377 HK | 4.35 | 6.7 | Buy | 4.25 | (21) | 26 | 7.7 | 6.1 | 4.3 | 5.2 | 19.7 | 13.5 | 62.6 | 50.1 |
Peer Comparison (Logistic)
| Company Name | Currency Code | Price (Local$) | Target Price (Local$) | Recommendation | PE (Local$) | PE Yield (Local$) | Yield (Local$) | P/B (Local$) | ROE (Local$) | NAV to NAV % |
|---|---|---|---|---|---|---|---|---|---|---|
| Global Logistic Props.*# | GLP SP | SGD 1.97 | SGD 2.73 | BUY | 11.5 | 30.8 | 14.6 | 0.8 | 1.2 | 3.5 |
| China Fortune Ld.Dev.'A'* | 600340 CH | CNY 25.74 | CNY 31.60 | BUY | 14.3 | 11.4 | 302.3 | 0.7 | 0.9 | 36.7 |
| Shenzhen Chiwan 'B'*^ | 200053 CH | HKD 16.15 | HKD 21.48 | BUY | 29.4 | 31.8 | 14.2 | 0.3 | 0.3 | 54.3 |
Summary of Key Points
- Sales Decline: Contracted sales slowed further in 1HFY16, falling 44% y-o-y.
- Earnings Decline: Core earnings and net profit declined significantly, indicating financial pressure.
- Valuation: CSC is currently trading at a 50% discount to NAV, with a revised price target.
- Strategic Growth: The company is expanding into logistics and e-commerce, with potential for growth in these segments.
- Risks: Sales and earnings are highly dependent on property development, which is underperforming.
- Recurring Income: Growth in recurring income from non-property segments is expected but may not offset the earnings shortfall.
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