1、 BOCI research is available electronically on Bloomberg (BOCR ), and at . NB: Buy = +10% compared with the relevant benchmark index over a 6-month period; Sell = -10% compared with the relevant benchmark index over a 6-month period; Hold = +10% and -10% compared with the relevant benchmark index ov
2、er a 6-month period; Not Rated (NR) PROPERTY Sector Update9 August 20100 Andy SO, CFA +852 2905 2167 Alfred LAU, CFA +852 2905 2109 Total Weekly Sales in 9 Key Cities 0500,0001,000,0001,500,0002,000,0002,500,0003,000,0003,500,0004,000,00005/0808/0811/0802/0905/0908/0911/0902/1005/102010 average: 1
3、.6m2009 average: 2.5m2H08 average: 1.3mSources: CREIS, BOCI Research BOCI China Property Index 9014019024029001/0706/0711/0704/0809/0802/0907/0912/0905/10Overall Tier-1 Tier-2* The ASP index tracks the simple average ASP change in 12 key cities Sources: CREIS, BOCI Research China Property Monthly Vo
4、lume improving but ASP set to drop Primary property sales in July for the 12 major cities in the PRC rose around 15% MoM, hitting a 3-month high after Aprils YTD peak. New sales launches in July increased 75% MoM, leading to a decent increase in sales volume for the month. The ASPs in tier-1 and tie
5、r-2 cities were on diverging trends in July with changes of -2% and +13% MoM, respectively. Tier-2 developers should suffer less in terms of ASP cuts this year. We reaffirm our OVERWEIGHT call on the sector and prefer tier-2 city plays like Country Garden and Evergrande. R Approved for Sales still l
6、ow New sales launches in July jumped 75% MoM, explaining the decent increase in sales volume for the month. We fully expect sales launches to rise even more in the coming three months, as most developers are still behind schedule in meeting their sales targets. As such, they are likely to speed up s
7、ales in 2H10. The primary property sales volume (the proxy for current demand) of area newly approved for sales (proxy for future new supply) is well below 1.0x for the six key cities in China, meaning current demand is lower than the potential future supply. In particular, tier1 cities such as Beij
8、ing, Shenzhen and Guangzhou all have a ratio below 1.0x year to date, potentially causing more ASP cuts in the future. Tier2 cities like Wuhan and Chongqing are faring better with higher ratios (thus potentially milder pressure to make ASP cuts). Figure 5. New Sales Launches by Area (sqm) Beijing Sh
9、anghai Shenzhen Nanjing Hangzhou Tianjin Wuhan Chengdu Total Total MoM change (%) Feb-10 0 150,950 0 103,550 37,631 0 0 52,750 344,881 (67) Mar-10 60,980 220,125 15,044 12,100 55,242 368,318 0 97,280 829,089 140 Apr-10 83,046 394,850 12,872 168,975 90,468 245,144 19,346 258,025 1,272,726 54 May-10 5
10、6,553 286,220 39,193 112,740 81,163 406,561 45,361 231,780 1,259,571 (1) Jun-10 30,789 191,625 32,258 59,175 99,332 20,550 59,405 125,525 618,659 (51) Jul-10 58,637 232,840 0 96,340 59,984 375,013 26,303 233,680 1,082,798 75 2010 average 52,413 245,842 42,373 102,549 70,827 213,543 23,531 188,478 93
11、9,556 - 2009 average 88,890 357,985 78,846 154,387 76,510 189,929 13,235 219,707 1,174,499 - Sources: CREIS, BOCI Research Figure 6. Primary Sales Volume to Area Newly Approved for Sales Sales / Approved for sale (x) Beijing Shenzhen Guangzhou Hangzhou Wuhan Chongqing Jan-10 1.0 0.8 0.7 0.8 1.9 1.0
12、Feb-10 1.7 3.1 0.9 0.8 0.9 1.5 Mar-10 0.9 8.7 1.9 0.8 1.1 1.3 Apr-10 1.5 1.6 1.0 1.5 2.2 1.4 May-10 0.4 0.3 0.5 0.3 0.9 1.1 Jun-10 0.6 0.7 1.6 0.4 0.4 1.0 Jul-10 0.7 2.7 0.7 0.9 1.3 1.0 2010 average 0.9 1.0 0.9 0.8 1.1 1.2 2009 average 1.5 1.8 1.1 1.3 3.5 1.3 Sources: CREIS, BOCI Research 9 August 2
13、010 China Property Monthly 5THIS DOCUMENT MAY NOT BE DISTRIBUTED IN OR INTO THE PRC. Digestion Cycle Continued to Expand Total area available for sales in the major six cities (namely, Beijing, Shanghai, Chongqing, Shenzhen, Hangzhou and Chengdu) rose 2% MoM to 44m sqm. Along with the 6% MoM decline
14、 on the 12month rolling average sales for these cities, we estimate that the average digestion cycle has expanded slightly by close to 0.4 month. Yet, current digestion cycle is still largely below the mean level, but we expect this figure to climb steadily given the demand shrinkage and steady decl
15、ine in ASP. Figure 7. Digestion Cycle (No. of months to digest inventory) High Period Low Period Current (i.e., June 2010) MoM change Mean Record since Beijing 26.3 Nov-08 8.4 Apr-10 10.3 0.9 13.4 May-06 Shanghai 6.9 Jan-09 2.1 Feb-10 3.8 0.4 3.5 Jul-07 Chongqing 14.5 Jan-09 5.0 Mar-10 5.3 0.2 8.8 A
16、pr-08 Shenzhen 26.1 Sep-08 5.4 Mar-07 7.2 -0.1 10.8 May-06 Hangzhou 22.6 Jan-09 3.4 Dec-09 6.6 0.5 10.0 May-06 Chengdu 21.6 Dec-08 7.6 Dec-09 10.6 0.7 12.7 Dec-08 Average 19.7 5.3 7.3 0.4 9.9 Note: Digestion cycle = Area available month/Rolling average 12month sales Sources: CREIS, BOCI Research Fas
17、ter ASP Cut in Tier-1 Cities Hsharelisted PRC developers under our coverage are currently trading at a 50% discount to our 2010E NAV, not too far away from the trough of 66% that was witnessed in back in November 2008. The current sector valuation does not appear demanding. With no major news on the
18、 policy front in July and the pick up in sales volume, the share prices of Hsharelisted developers surged by a simple average of 12% in June. Our ASP index at endJuly was on par with the peak in April 2010 but also around 13% higher than the level at end2009. Our ASP index showed once again that tie
19、r1 cities are suffering largerthanaverage ASP cuts. Tier2 developers should suffer less in terms of ASP cuts this year. We reaffirm our OVERWEIGHT call on the sector and prefer secondtier cities plays like Country Garden and Evergrande. R Tier 2 cities include Hangzhou, Tianjin, Chongqing, Chengdu,
20、Nanjing, Suzhou, Xiamen, Fuzhou Source: , BOCI Research 9 August 2010 China Property Monthly 6THIS DOCUMENT MAY NOT BE DISTRIBUTED IN OR INTO THE PRC. Figure 9. Valuation Matrix Developer Stock code Share priceMarket cap BOCI 2010E NAVDiscount to 2010E NAV Target price P/E (x) P/B (x) Net gearing (%
21、) Yield (%) (HK$) (HK$ m) Rating (HK$) (%) (HK$) 2009* 2010E 2009 2010E 2009 2010E 2009 2010EAgile Property 3383.HK 9.80 34,033 BUY 20.46 52 11.26 17.8 12.6 2.2 1.9 51.1 57.7 1.8 2.4 COLI 0688.HK 16.60 135,660 BUY 17.09 3 17.09 22.1 16.2 3.2 2.8 22.8 42.8 0.8 1.5 China Resources Land 1109.HK 15.92 8
22、0,196 HOLD 25.63 38 17.94 29.9 23.5 2.1 2.0 20.4 48.4 1.5 1.1 China South City 1668.HK 1.2 7,175 BUY 4.72 75 2.00 NA 15.4 NA 0.8 50.6 4.2 0.0 1.7 Country Garden 2007.HK 2.42 40,412 BUY 4.81 50 2.66 20.2 17.6 1.7 1.6 61.8 77.4 2.1 2.0 Evergrande 3333.HK 2.72 40,800 BUY 5.73 53 3.72 154.7 4.8 2.6 1.8
23、52.0 20.2 0.3 2.1 Fantasia 1777.HK 1.44 7,018 BUY 4.11 65 1.64 13.6 7.9 1.6 1.4 0.0 33.1 1.2 2.2 Guangzhou R or (ii) do not have any individuals employed by or associated with any member companies of BOCI Group serving as an officer of any of the listed corporations reviewed. Certain member companie
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