1、 Produced by: The Royal Bank of Scotland N.V., (Hong Kong) BranchEquity | China | Real EstateImportant disclosures can be found in the Disclosures Appendix. Greentown China Love and hate GREE was the best performing China property stock in 2009 (up 282% versus the82% sector average), but its high ge
2、aring should overshadow its robust sales inthe current market downturn. Managements preference for expensive land acquisitions and reliance on trust financing are weaknesses. Key forecasts FY08AFY09AFY10FFY11FFY12FTotal property income (Rmbm) 6,635 8,727 10,192 2) medium-term (-2%), 2013-14F, assumi
3、ng continuous replenishment but no growth in the land bank; and 3) long term (-4%), with 3% perpetual land bank growth. Our DCF calculations are based on medium-term price growth of 10% and volume growth of 0%, with a beta of 1.9x. While we value the properties for sale using DCF (HK$13.48/share), w
4、e value the investment properties for lease using our estimate of mid-2011 NAV (HK$2.34/share). Investment property earnings typically take longer to book and may not be readily apparent in free cash flows. The value of rental assets also depends upon rental and capitalisation rates. As a reference,
5、 we estimate the mid-2011 NAV (HK$32.98/share) based on the companys entire existing land bank. We believe a pure NAV approach fails to distinguish the sales capability, execution speed and land-purchase skills of different developers on an ongoing basis. NAV may also overestimate the value of the c
6、ompany by ignoring the possibility of losses on future projects that may destroy wealth created by the existing land bank. Table 2 : Financial summary (Rmb m) Summary 2009 2010F 2011F 2012F 2013F Revenue 8,727 10,192 26,734 49,911 58,662 Property development 8,632 10,124 26,471 49,624 58,047 Propert
7、y investment and others 95 68 263 287 615 Cost of sales (6,415) (7,026) (19,739) (35,415) (43,580) Gross profit 2,312 3,166 6,995 14,496 15,083 Adjusted net profit 713 865 2,748 3,810 5,440 Gross margin 26% 31% 26% 29% 26% Net margin 12% 11% 10% 8% 9% Financial stability Net gearing 179% 118% -23% -
8、15% -12% Interest coverage 0.7 0.8 1.6 3.8 5.6 Associates/net profit 86% 12% 38% 21% 36% SGA/revenue 14% 15% 12% 10% 9% Tax/pre-tax income 72% 70% 51% 50% 51% Net operating cash flow 2,702 5,503 15,463 2,820 5,660 Net investing cash flow (4,862) (2,069) (768) (1,778) (1,860) Net financing cash flow
9、10,068 1,397 570 (1,628) (20,216) Source: Company data, RBS forecasts Table 3 : Enterprise free cash flows (HK$ bn) 2010F 2011F 2012F 2013F 2014F 2015F 2016F 2017F 2018F 2019F 2020F 2021F 2022F (HK$bn) Near-term Medium-term Long-term, beyond 2014F DCF-based TP derivation 106% (HK$23.3bn) -2% (-HK$0.
10、4bn) -4% (HK$0.8bn) Cash sales 50.5 55.5 61.1 67.2 73.9 81.3 89.4 98.3 108.2 119.0 Land purchase (21.8) (24.0) (26.4) (29.0) (31.9) (35.1) (38.6) (42.5) (46.8) (51.4) Construction capex (20.8) (21.9) (23.0) (24.1) (25.3) (26.6) (27.9) (29.3) (30.8) (32.3) SGA cash outflow (4.8) (5.3) (5.9) (6.4) (7.
11、1) (7.8) (8.6) (9.4) (10.4) (11.4) Taxes and other outflows (3.5) (4.5) (5.6) (6.8) (8.0) (9.2) (10.5) (12.0) (13.6) (15.3) Enterprise FCF 3.9 14.1 13.4 (0.5) (0.2) 0.2 0.8 1.5 2.6 3.7 5.1 6.7 8.5 Based on existing land banks Cash sales 53.9 63.5 61.1 54.0 35.3 13.8 7.2 6.6 5.5 0.6 0.0 0.0 0.0 FCF 3
12、.9 14.1 13.4 16.8 15.7 5.3 2.4 2.2 2.2 (0.3) 0.0 0.0 0.0 Notes: Near-term performance based on existing land bank. Medium-term growth based on continuous replenishment, but without growth, of land bank while ASP increases by 10% and GFA increases by 0% per year. Long-term growth of 3%. Source: RBS f
13、orecasts Chart 1 : Breakdown of target price (HK$/share) 13.482.34(8.59)0.64-10-5051015201Other assetsNet cashGAV for investment propertiesDCF for development propertiesSource: RBS forecasts Table 1 : Earnings changes/ vs consensus (RMB m) 2010F 2011F 2012F Revenue New 10,192 26,734 49,911 Old 10,89
14、4 29,217 44,810 Diff -6% -8% 11% Vs consensus RBS 10,192 26,734 49,911 Consensus 11,670 21,540 39,106 Diff -13% 24% 28% Adjusted net profit* New 865 2,748 3,810 Old 977 3,039 5,196 Diff -11% -10% -27% Versus consensus RBS 865 2,748 3,810 Consensus 1,613 2,391 4,432 Diff -46% 15% -14% * Adjusted for
15、revaluation gains of invest-ment properties and net of deferred tax. Source: Bloomberg, RBS forecasts Greentown China | Methodology | 11 June 2010 3Key assumptions and sensitivity analysis Table 4 : Key assumptions behind out target price and NAV derivations DCF periods and discount rates Price and
16、volume assumptions LAT calculations (Rmb psm)Growth rates of enterprise FCF At the beginning of the medium term Selling price 16,190 Near-term (implied CAGR) 85% Selling price (Rmb psm) 16,190 Business taxes 890 Medium-term (derived) n/a Land cost (Rmb psm) 7,000 Land cost 7,000 Long-term (fixed) 3%
17、 Construction cost (Rmb psm) 7,000 Construction cost 7,000 Duration Land bank size (m sqm) 7.9 Mark-ups 2,800 Near-term from 2011F to 2012F fixed GFA sold per year (m sqm) 2.5 Capitalised interests 1,400 Medium term from 2013F-14F 2 GFA booked per year (m sqm) 2.8 Total deductibles 19,090 Discount r
18、ates Growth during the medium term Taxable appreciations (2,901) Near-term 18.2% Selling price 10.0% Appreciations/deductibles -15% Medium-term 17.8% Land cost 10.0% LAT payable - Long-term (beyond 2014F) 17.4% Construction cost 5.0% LAT/sales 0.0% Risk-free rate 5.0% GFA sold per year 0.0% Equity r
19、isk premium 8.0% LAT/sales 0.0% Beta 1.9 SGA/sales 9.6% Source: RBS forecasts Table 5 : Scenario analysis Worst Worse Better Best Central Results NAV (HK$/share) 23.7 23.7 33.3 40.1 32.98 Target price (HK$/share) (15.5) (12.8) 10.3 25.1 7.88 Revenues (HK$bn) 2011F 27.7 26.5 28.9 27.5 30.5 2012F 50.4
20、 50.7 55.0 66.2 56.9 2013F 58.0 58.1 65.2 73.4 66.9 Earnings (HK$bn) 2011F 1.5 1.5 2.7 3.4 3.1 2012F 0.5 0.6 3.4 6.9 4.3 2013F 0.9 1.0 5.4 10.0 6.2 Free cash flows (HK$bn) 2011F 15.0 5.6 10.4 5.8 14.1 2012F 10.6 11.8 13.2 36.0 13.4 2013F (4.2) (4.4) (0.4) 4.3 (0.5) Price 2010F growth -20% -20% -10%
21、0% varies* 2011F growth 0% 0% 0% 0% n/a 2012F growth 10% 10% 10% 10% n/a Volume 2010F variance -40% -30% -10% 0% -20% 2011F variance 0% 0% 0% 0% 0% 2012F variance 0% 0% 0% 0% 0% Source: RBS forecasts * For the central scenario: ASP assumptions for mass market project decline range from 5 to 20%; whi
22、le ASP decline on the luxury project range from 0 to 5% respectively Greentown China | Investment View | 11 June 20104Chart 2 : Revenue growth (%) Chart 3 : Adjusted net profit growth (%) 17%162%87%34%85%82%36%22%30%0%20%40%60%80%100%120%140%160%180%FY09-FY10F FY10F-FY11F FY11F-FY12FGREE Company con
23、sensus Sector median21%218%39%126%48%85%10%20%29%0%50%100%150%200%250%FY09-FY10F FY10F-FY11F FY11F-FY12FGREE Company consensus Sector medianSource: RBS forecasts, Bloomberg Source: RBS forecasts, Bloomberg Chart 4 : Share price performance of China property companies (1 year) -8%-9%-11%-14%-16%-18%-
24、21% -21%-22%-25%-29%-29%-30%-37%-42%-43%-48%-60%-50%-40%-30%-20%-10%0%KWGP COLI CRLN SHIM SOHO FRAN FORT PropindexAGIL GREE SINO YLLG HOPS SHUI GR China: Rmb/sq m, HK: HK$/sq ft; #reported currency m. Source: RBS forecasts Greentown China | Investment View| 11 June 2010 9Table 13 : Summary of develo
25、pment properties Development properties City Own GFA* Time of Costs of Current Current GFA sold During the year# Attributable free cash flows Disc Gross asset value# (%) Sales Delivery Land Const. price margin year-end Revenue Asso. 2010F 2011F 2012F 2013F 2014F 2015F 2016F 2017F 2018F rate 2010F 20
26、11F 2012F 2011F Wenzhou Lucheng Plaza Residential P1 Wenzhou 60% 117 Sep 08 Jun 11 11,041 12,000 41,000 44% 100% 4,748 - 76 (119) - - - - - - - 11.0% (107) - - Xixi Sincere Garden P1 Hangzhou 100% 95 Dec 09 Sep 11 10,891 10,000 29,000 28% 96% 2,609 - 1,590 (268) - - - - - - - 11.0% (242) - - Shaoxin
27、g Yulan Garden P1 Shaoxing 35% 199 Dec 08 Sep 11 3,409 5,500 13,000 31% 92% - 134 106 (32) - - - - - - - 11.0% (29) - - Taizhou Yulan Plaza P1 Taizhou 49% 117 Jun 09 Sep 11 3,738 6,000 18,000 46% 100% - 247 185 (86) - - - - - - - 11.0% (77) - - Zhoushan Yulan Garden Zhoushan 100% 147 Sep 09 Dec 11 4
28、,069 5,000 15,000 40% 90% 1,905 - 302 (125) - - - - - - - 11.0% (113) - - Cixi Rose Garden Apartment Cixi 49% 106 Sep 09 Sep 11 7,270 4,000 18,000 37% 96% - 191 26 (40) - - - - - - - 11.0% (36) - - Hope Town P2 Hangzhou 45% 114 Sep 09 Dec 11 589 3,500 19,000 78% 100% - 286 197 (72) - - - - - - - 11.
29、0% (65) - - Chunan 1000-Island Lake Resort Condo P3 Chunan 80% 69 Sep 10 Dec 11 2,055 10,000 26,000 54% 36% 1,713 - 95 382 - - - - - - - 11.0% 345 - - Hangzhou Blue Sapphire Mansion P1 Hangzhou 100% 50 Jun 09 Dec 11 12,508 12,000 29,000 15% 100% 1,431 - (96) (183) - - - - - - - 11.0% (165) - - Huzho
30、u Majestic Mansion Townhouse Huzhou 70% 88 Sep 09 Jun 11 3,860 5,000 19,000 53% 18% 1,112 - (23) 350 309 - - - - - - 11.0% 567 279 - Hefei Rose Garden Project P1 (villa) Hefei 100% 55 Jun 10 Dec 11 10,776 4,000 20,000 26% 74% 1,093 - 551 122 - - - - - - - 11.0% 110 - - Jinlan Apartment (Dadou Road)
31、Hangzhou 50% 44 Nov 09 Dec 11 8,642 4,000 25,000 49% 98% - 141 (12) (33) - - - - - - - 11.0% (29) - - Beijing Sincere Garden P1 Beijing 50% 27 Mar 10 Dec 11 10,453 10,000 38,300 47% 100% - 131 336 (60) - - - - - - - 11.0% (54) - - Cixi Rose Garden Villa + Retail Cixi 49% 36 Sep 10 Dec 11 7,271 4,000
32、 35,000 68% 64% - 137 195 94 - - - - - - - 11.0% 85 - - Beijing Sincere Garden P2 Beijing 50% 31 Mar 10 Dec 11 10,453 10,000 38,000 46% 60% - 65 160 83 - - - - - - - 11.0% 75 - - Jinan National Games Residential P2 (apartment) Jinan 45% 81 Jun 10 Mar 11 1,147 6,000 12,000 40% 48% - 62 92 155 - - - -
33、 - - - 11.0% 139 - - Xiangshan Lily Apartment P2 Xiangshan 50% 66 Dec 09 Jun 11 3,325 4,000 15,000 51% 80% - 102 215 39 - - - - - - - 11.0% 35 - - Wuxi Yulan Garden P2 Wuxi 85% 104 Nov 09 Dec 11 1,666 4,000 10,000 43% 77% - 118 212 3 - - - - - - - 11.0% 3 - - Shanghai Rose Garden P2 Shanghai 100% 19
34、 Jun 10 Dec 11 9,921 12,000 45,000 51% 40% 809 - 154 262 26 - - - - - - 11.0% 257 23 - Shanghai Ailisheng International Tower Shanghai 40% 21 Jun 11 Sep 11 32,078 10,000 60,000 30% 0% - 22 (264) 179 139 - - - - - - 11.0% 274 125 - Beijing Lily Apartment P3 Beijing 80% 72 Sep 09 Jun 11 311 3,500 12,0
35、00 68% 88% 747 - 159 23 - - - - - - - 11.0% 20 - - Yulan Rose Garden Project P1 Hangzhou 51% 20 Sep 10 Dec 11 11,366 10,000 40,000 47% 30% 691 - 62 104 54 - - - - - - 11.0% 138 49 - Changxing Plaza Residential P2 Changxing 51% 107 Mar 10 Dec 11 2,010 3,500 7,000 21% 72% 672 - 127 (3) - - - - - - - 1
36、1.0% (2) - - Chunan 1000-Island Lake Rose Garden Villa + Retail Chunan 51% 61 Dec 10 Dec 11 1,708 10,000 15,000 22% 0% 668 - (134) 103 110 - - - - - - 11.0% 183 100 - Changsha Green Bamboo Garden P4 Changsha 52% 66 Mar 11 Jun 11 1,396 4,000 16,000 66% 0% 649 - (84) 188 162 - - - - - - 11.0% 301 146
37、- Others 7,624 (595) Sub-total 26,471 1,041 * refers to 000 sqm; China: Rmb/sq m, HK: HK$/sq ft; #reported currency m. Source: RBS forecasts Greentown China | Investment View| 11 June 2010 10Table 14 : Summary of development properties Development properties City Own GFA* Time of Costs of Current Cu
38、rrent GFA sold During the year# Attributable free cash flows Disc Gross asset value# (%) Sales Delivery Land Const. price margin year-end Revenue Asso. 2010F 2011F 2012F 2013F 2014F 2015F 2016F 2017F 2018F rate 2010F 2011F 2012F 2012F Wenzhou Lucheng Plaza Residential P2 Wenzhou 60% 105 Jun 09 Jun 1
39、2 10,664 12,000 41,000 45% 96% 4,249 - 102 (127) (100) - - - - - - 11.0% (196) (90) - Xixi Sincere Garden P3 Hangzhou 50% 121 Sep 10 Dec 12 8,193 10,000 29,000 37% 64% - 312 730 238 (242) - - - - - - 11.0% 18 (218) - Xidebao Project P1 Hangzhou 43% 91 Dec 10 Dec 12 21,564 10,000 35,000 10% 0% - (87)
40、 (43) 106 747 - - - - - - 11.0% 703 674 - Hangqifa Residential P1 Hangzhou 50% 80 Dec 10 Dec 12 12,389 15,000 40,000 32% 0% - 137 (120) 69 774 - - - - - - 11.0% 691 698 - Zhuji Project P2 Zhuji 60% 325 Dec 09 Dec 12 4,215 3,000 11,000 34% 75% 3,217 - 169 217 (180) - - - - - - 11.0% 50 (162) - Shangh
41、ai Bund House P1 Shanghai 51% 56 Sep 09 Jun 12 12,959 12,000 60,000 58% 93% 3,167 - 517 12 (36) - - - - - - 11.0% (18) (32) - Hangzhou Blue Sapphire Mansion P3 Hangzhou 100% 62 Jun 10 Dec 12 14,180 12,000 48,000 45% 100% 2,953 - 2,038 (246) (247) - - - - - - 11.0% (422) (222) - Beijing Majestic Mans
42、ion P2 Beijing 100% 55 Sep 10 Jun 12 10,120 12,000 50,000 56% 80% 2,730 - 1,467 81 (163) - - - - - - 11.0% (60) (147) - Xixi Sincere Garden P2 Hangzhou 100% 96 Dec 10 Dec 12 11,752 10,000 29,000 25% 0% 2,668 - (194) 1,717 (264) - - - - - - 11.0% 1,333 (238) - Lijiang Apartment (Jiahe Jiubao) P2 Hang
43、zhou 100% 108 Sep 09 Sep 12 2,630 6,000 30,000 71% 90% 2,474 - 564 1 (138) - - - - - - 11.0% (112) (125) - Ningbo Crown Garden Ningbo 60% 132 Dec 09 Jun 12 2,759 4,000 18,000 62% 80% 2,140 - 663 98 (45) - - - - - - 11.0% 52 (41) - Jinan National Games Residential P3 (apartment) Jinan 45% 171 Sep 10
44、Jun 12 2,720 4,500 12,000 40% 36% - 179 135 290 (77) - - - - - - 11.0% 199 (69) - Hangzhou Blue Sapphire Mansion P2 Hangzhou 100% 35 Jun 09 Jun 12 13,713 12,000 45,000 43% 100% 1,565 - (25) (112) (56) - - - - - - 11.0% (146) (50) - Wuxi Yulan Garden P3 Wuxi 85% 171 Jun 11 Dec 12 2,443 4,000 10,000 3
45、6% 0% - 177 (65) 598 (36) - - - - - - 11.0% 510 (33) - Taizhou Yulan Plaza Qionghuayuan C2 Taizhou 40% 69 Mar 10 Jun 12 2,392 6,000 22,000 62% 60% - 182 186 101 (33) - - - - - - 11.0% 64 (30) - Suzhou Jinji Lake #6 (Rose Garden) Project P1 Suzhou 100% 29 Sep 10 Dec 12 29,121 10,000 40,000 2% 5% 1,22
46、1 - (28) 289 520 - - - - - - 11.0% 683 469 - Taohuayuan P5 (H1-2) Hangzhou 64% 34 Dec 10 Dec 12 3,249 12,000 35,000 56% 0% 1,213 - (29) 254 52 - - - - - - 11.0% 271 47 - Xizi Haitong Apartment Hangzhou 42% 71 Nov 09 Jun 12 4,440 5,000 17,000 44% 98% - 129 (32) (53) (30) - - - - - - 11.0% (72) (27) -
47、 Lilac Apartment Hangzhou 50% 78 Sep 09 Jun 12 1,378 5,000 15,000 57% 100% - 169 130 (65) (33) - - - - - - 11.0% (85) (29) - Shaoxing Jade Garden P3 Shaoxing 51% 25 Jun 11 Jun 12 20,912 12,000 42,000 22% 0% 1,034 - - 132 160 17 - - - - - 11.0% 261 158 15 Yulan Rose Garden Project P2 Hangzhou 51% 23
48、Dec 10 Mar 12 21,376 5,000 40,000 34% 0% 963 - (17) 248 108 - - - - - - 11.0% 311 97 - Hope Town P5 Hangzhou 45% 38 Jun 11 Dec 12 1,395 3,500 25,000 80% 0% - 128 - 113 118 11 - - - - - 11.0% 206 116 10 Taizhou Rose Garden Villa P2 Taizhou 35% 65 Jun 11 Sep 12 2,880 3,500 15,000 57% 0% - 85 (10) 84 9
49、3 9 - - - - - 11.0% 158 91 8 Nanjing Rose Garden P3 Nanjing 70% 38 Sep 10 Dec 12 1,574 6,000 25,000 70% 30% 953 - 97 193 21 - - - - - - 11.0% 191 19 - Wuxi Lihu Project P1 Wuxi 100% 37 Dec 10 Jun 12 23,130 4,000 25,000 -9% 0% 938 - (50) 555 211 - - - - - - 11.0% 672 190 - Others 18,139 (626) Sub-total 49,624 785 * refers to 000 sqm; China: Rmb/sq m, HK: HK$/sq ft; #reported currency m. Source: RBS forecasts Greentown China | Investment View| 11 June 2010 11Table 15 :
