20170413-招商证券_香港_-Industry_Report_16页_1mb_1mb

报告摘要

Industry Report Summary: China Property Sector

Core Content

This report discusses the current state and future outlook of the China property sector, focusing on the impact of tightening policies, transaction volume slowdown, and the weakening of developers' profitability. It also provides stock recommendations based on financial performance and resilience to market conditions.

Main Points

1. Market Overview

The property market has been complacent about developers' contract sales growth and profit margin recovery, but the report suggests a more cautious outlook, especially in 2Q/3Q17E.
Transaction volume in 38 major cities slowed sharply in April 2017, with a YoY decline of -35% MTD, following austerity measures.
The tightening policies have extended from top-tiered cities to lower-tiered cities, making this cycle more severe than previous ones.

2. Impact on Transaction Volume

The slowdown in transaction volume is attributed to a combination of demand-side restrictions (home purchase restrictions) and supply-side controls (presale permit restrictions).
The report forecasts a decline in national residential GFA sold from +1% YoY in 1Q17E to -9%/-12% YoY in 2Q/3Q17E.
Tier-1 cities are expected to see a -12% YoY decline in sales, tier-2 cities -8.8%, and tier-3 cities -4.7% in 2017E.

3. Profitability Concerns

Despite low inventory levels, property prices are not expected to translate into higher profits due to rising land prices.
The report forecasts a decline in industry gross profit margins from 29% in FY16 to 22% in FY18/19E.
Property prices are expected to grow by +5.0% for tier-1, +2.0% for tier-2, and +1.0% for tier-3 in 2017E.

4. Stock Picks

Longfor and COLI are recommended as preferred stock picks due to:
- Stronger and less cyclical recurring rental income
- Low leverage
- Ability to manage operating costs at low levels
Country Garden is given a neutral rating as its optimism is already priced in.
Vanke, CRLand, and Agile are not rated (N-R) due to the lack of clear valuation targets.

Key Financial Data

Company	Ticker	Rating	Current Price (HK$)	Target (HK$)	Upside (%)	17E P/E	18E P/E	19E P/E	17E Yield (%)	18E Yield (%)	19E Yield (%)
COLI	688 HK	Buy	22.95	25.43	11%	7.4	6.6	6.1	4.1	4.6	5.0
Longfor	960 HK	Buy	13.44	15.15	13%	7.6	6.8	6.0	4.7	5.4	6.4
Country Garden	2007 HK	Neutral	7.54	6.63	-12%	10.1	7.5	6.0	3.5	4.6	5.8
Vanke*	2202 HK	N-R	21.1	N/A	N/A	8.2	7.1	6.5	5.1	5.8	6.2
CRLand*	1109 HK	N-R	22.35	N/A	N/A	8.1	7.0	6.3	3.5	4.1	4.7
Agile*	3383 HK	N-R	6.75	N/A	N/A	6.7	5.9	5.1	5.9	6.5	7.5
Shimao*	813 HK	N-R	12.84	N/A	N/A	5.8	5.1	4.5	6.0	6.8	7.9
Yuzhou*	1628 HK	N-R	3.41	N/A	N/A	4.8	4.0	3.3	7.4	9.0	10.7

*Sources: Bloomberg, CMS (HK)

Key Insights

Transaction Volume: The report highlights a significant slowdown in transaction volume, with local registrations in 38 major cities declining sharply in April 2017.
Profitability: The resilience of property prices does not equate to higher profitability for developers due to rising land costs.
Recurring Income: Longfor has the highest proportion of revenue from recurring rental income, which is less cyclical and provides stability.
Cost Control: COLI and Longfor demonstrate strong cost management with low SG&A expenses relative to sales.
Capital Management: Developers with lower gearing ratios, such as COLI, are better positioned to manage financial stress during tightening cycles.

Conclusion

The report emphasizes the need for caution in the China property sector due to the tightening policy environment and the potential for continued decline in transaction volumes and profitability. It recommends focusing on companies with strong recurring income, efficient cost management, and healthy capital structures.

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