20140904-DBS_Group-Central_China_Real_Estate_13页_352kb
报告摘要
Central China Real Estate Summary
Core Content and Key Highlights
Company Overview:
Central China Real Estate (832 HK) is a real estate developer primarily focused on China property development. The report is issued by DBS Group Research on 4 September 2014, and it recommends a "BUY" rating with a 12-month price target of HK$2.44.
Valuation Metrics:
- Current price is trading at 3.4x PE, which is a 69% discount to NAV.
- The price-to-book (P/BV) ratio is 0.6x, significantly lower than the small cap average of 4.7x.
- The company's share price is undervalued compared to its net asset value, offering an attractive valuation.
Sales and Inventory Management:
- The slow sales in the first half of 2014 were attributed to limited new launches and tight mortgage availability.
- The company has Rmb4.8bn in completed but unsold inventory, which includes high-quality commercial properties.
- The company plans to reduce completions to manage inventory and improve sales through product upgrades rather than price cuts.
- It aims to maintain a gross margin of 30-35% in the medium term, with some projects in lower-tier cities showing good margins (e.g., 40%, 59%).
Policy Outlook:
- Management expects the government to continue loosening policies to stabilize the market.
- The mid-to-high end market (ASP Rmb12-26k/sm) is anticipated to benefit from further policy relaxation.
Land Bank Strategy:
- The company intends to maintain a land bank sufficient for 5-7 years of development.
- It will focus on acquiring land in Zhengzhou to support its expansion strategy.
Investment Properties and Hotels:
- The company will hold commercial properties and hotels for rental income and capital appreciation.
- New commercial properties will be limited to core city centres.
Valuation Comparison
| Company Name | Code | 4-Sep Price HK$ | Mkt Cap (HK$bn/US$m) | 14F PE x | 15F PE x | 14F EPS (RMB) | 15F EPS (RMB) | 14F EPS Gth (%) | 15F EPS Gth (%) | 14F P/E Yield x | 15F P/E Yield x | 15F ROE (%) | 15F Net Gearing (%) | 15F P/BV x | Discount to NAV (%) |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| China Overseas* | 688 HK | 22.75 | 186.0/109.0 | 8.5 | 7.1 | 0.47 | 0.56 | (5) | 14 | 2.1 | 2.6 | 18.4 | 18.8 | 28.2 | 1.7 |
| Country Garden* | 2007 HK | 3.43 | 65.4/49.2 | 9 | 5.1 | 0.41 | 0.47 | 19 | 14 | 7.1 | 7.8 | 20.7 | 20.9 | 64.3 | 1.1 |
| CR Land* | 1109 HK | 18.7 | 109.0/54.1 | 11.5 | 10.6 | 0.47 | 0.56 | (35) | 14 | 2.4 | 2.6 | 10.8 | 10.8 | 39.2 | 1.3 |
| Evergrande* | 3333 HK | 3.34 | 49.2/31.3 | 10 | 5.4 | 0.42 | 0.47 | (42) | 12 | 4.5 | 4.9 | 12.1 | 12.2 | 69.5 | 0.6 |
| Shimao Property* | 813 HK | 17.8 | 61.8/30.1 | 6.2 | 5.5 | 0.48 | 0.56 | 8 | 12 | 4.8 | 5.3 | 18.0 | 17.7 | 57.4 | 1.2 |
| China Vanke 'H' | 2202 HK | 15.32 | 168.8/100.4 | 7.5 | 6.5 | n.a. | n.a. | 18 | n.a. | 4.0 | 4.6 | 21.1 | 20.9 | 44.7 | 1.7 |
| Agile Property* | 3383 HK | 6.43 | 22.4/8.6 | 5.2 | 5.1 | 0.3 | 0.36 | (30) | (18) | 5.2 | 5.3 | 9.6 | 9.2 | 73.4 | 0.5 |
| COGO* | 81 HK | 5.14 | 11.7/3.9 | 4.5 | 3.9 | 0.3 | 0.37 | (17) | (18) | 4.5 | 5.2 | 20.8 | 19.8 | 44.1 | 1.0 |
| Franshion* | 817 HK | 2.21 | 20.2/2.5 | 6.3 | 5.2 | 0.3 | 0.36 | (18) | (20) | 6.1 | 6.0 | 10.1 | 11.2 | 44.5 | 0.7 |
| Central China* | 832 HK | 2.03 | 4.9/0.3 | 3.9 | 3.4 | 0.48 | 0.61 | (2) | 15 | 6.4 | 8.9 | 15.8 | 16.2 | 37.2 | 68.5 |
Key Points
- Valuation: Central China Real Estate is currently trading at a significant discount to NAV and has a low P/BV ratio, indicating strong potential for value appreciation.
- Sales Outlook: Management is positive about the second-half sales outlook, expecting further policy support to boost the market.
- Inventory Strategy: The company is actively managing inventory by slowing completions and focusing on product upgrades to facilitate sales.
- Gross Margin: It aims to maintain gross margins between 30-35% in the medium term, with several projects in lower-tier cities showing good margins.
- Land Bank: Maintaining a sufficient land bank is crucial for continued growth, with plans to acquire land in Zhengzhou.
- Investment Strategy: The company will focus on holding commercial properties and hotels for rental income and capital gains, limiting new commercial developments to core city areas.
Conclusion
The report highlights that Central China Real Estate is a well-positioned player in the real estate sector, with a strong focus on inventory and cash flow management. It is currently undervalued, offering a compelling investment opportunity, especially with the potential for improved sales in the second half of the year due to anticipated policy support. The company's strategy of maintaining a land bank and managing inventory effectively supports its long-term growth prospects.
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