20150901-DBS_Group-碧桂园-02007.HK-NDR_takeaways_Controlled_expansion_in_Tier_12_cities_12页_338kb

报告摘要

Country Garden Holdings Company Limited - Investment Summary (1 September 2015)

Core Content

This report provides an investment analysis of Country Garden Holdings Company Limited (2007 HK), focusing on its financial performance, expansion strategy, and valuation metrics. The report highlights the company's strong fundamentals and strategic collaborations, while also noting key risks and valuation opportunities.

Main Points

Investment Recommendation: BUY
Last Traded Price: HK$2.69
Price Target: HK$4.86 (81% upside)
Potential Catalyst: Acceleration in contracted sales
Valuation Metrics:
- P/E (FY16): 4.7x
- P/BV (FY16): 0.7x
- EV/EBITDA (FY16): 4.8x
- Discount to NAV: 36%
Key Concerns:
- Sustainability of growth
- Oversupply in certain cities
- Margin compression
- Malaysia exposure

Financial Forecasts

FY Dec (RMB m)	2014A	2015F	2016F	2017F
Turnover	84,549	101,733	111,050	124,734
EBITDA	17,394	16,403	17,343	18,788
Pretax Profit	16,369	15,707	16,271	17,917
Net Profit	10,229	9,610	10,613	11,825
Core Profit	9,017	9,610	10,613	11,825
EPS (RMB)	0.54	0.44	0.47	0.52
EPS (HK$)	0.66	0.53	0.57	0.64
EPS Growth (%)	-	Nil	7.7	11.4

Strategic Expansion

Focus on Tier 1/2 cities: CG is expanding to Tier 1/2 cities to increase long-term scale.
Gross margin target: 25% for new projects in Tier 1/2 cities.
Net margin target: 12% for new projects in Tier 1/2 cities.
Land acquisitions: Management plans to spend Rmb12bn on land acquisitions in 2H15 (vs Rmb8bn in 1H15).
New Projects: 26 new projects will be launched in 2H15, adding Rmb70-80bn of new saleable resources.

Collaboration with Ping An

Cooperation Areas: Land acquisitions, community business, financing, and marketing.
Financing Support: Ping An has subscribed to US$100m of syndicated loans and Rmb1bn of Rmb6bn domestic bonds.
Securitisation: Ping An may consider taking part of the stakes when CG securitises its hotel portfolio.
Impact: This support is expected to lower CG's finance costs and assist in expansion.

Sales Outlook

August Sales: Rmb10bn (+40% m-o-m, +34% y-o-y).
September Sales: Expected to rise further with nine new project launches contributing over Rmb10bn.
2H Sales: Management expects monthly sales to exceed Rmb15bn from September to November.
Tier 3 Cities: Sales remained stable with recent launches in Lufeng, Zhengzhou, and Huaihua achieving Rmb1bn, Rmb350m, and Rmb1bn respectively within a week.

Valuation Comparison

Company Name	Code	1-Sep Price HK$	Mkt Cap HK$bn	15F PE x	16F PE x	12-m Target HK$	EPS Gth (%)	PE (%)	Yield (%)	ROE (%)	Net Gearing (%)	P/Bk x	NAV to NAV HK$
Country Garden*	2007 HK	2.69	60.8	5.1	4.7	4.86	(20)	6.2	6.4	15.4	14.8	0.7	4.4
China Overseas*	688 HK	22.15	218.4	7.1	6.6	38.96	(8)	2.5	2.9	17.2	15.5	1.4	25.4
CR Land*	1109 HK	18.6	128.9	10.2	8.8	24.98	(28)	6.6	2.7	11.0	10.9	1.1	27.5
China Vanke 'H'	2202 HK	17.92	198.0	9.6	8.2	23.41	8	3.4	3.7	18.2	18.6	1.8	22.4
Dalian Wanda 'H'	3699 HK	47.5	215.0	9.6	7.7	n.a.	(39)	2.5	3.0	11.4	13.4	1.1	n.a.
Evergrande*	3333 HK	5.08	73.7	9.8	7.2	5.35	(50)	10.2	2.5	5.7	7.8	0.6	9.4
Shimao Property*	813 HK	10.32	35.8	3.9	3.7	13.50	(7)	8.3	8.7	15.2	14.6	0.6	28.5

Risk Factors

Macroeconomic Risk: A slowdown in China's economy could impact the property sector.
Policy Risk: Sector-wide re-rating or de-rating due to unexpected policy changes.

Analysts

Danielle WANG CFA: +852 2820 4915, danielle_wang@hk.dbsvickers.com
Carol WU: +852 2863 8841, carol_wu@hk.dbsvickers.com
Andy YEE CFA: +852 2971 1773, andy_yee@hk.dbsvickers.com
Ken HE CFA: +86 21 6888 3375, ken_he@hk.dbsvickers.com

Key Highlights

Valuation: Country Garden is trading at an attractive level compared to large cap peers.
Discount to NAV: 36%, indicating potential for value appreciation.
Financial Health: Management plans to reduce USD debt to 30% from 40% by replacing offshore loans with domestic bonds.
Gearing: Expected to rise slightly by year-end due to expansion plans.

Conclusion

The report maintains a BUY recommendation for Country Garden, citing its attractive valuation, strategic expansion into Tier 1/2 cities, and collaboration with Ping An. Despite key concerns such as margin compression and Malaysia exposure, the analysts believe the company's growth potential and financial management will support its stock price.

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