Company Update, 5 June 2015
Agile Property (3383 HK) Neutral (Maintained) Property - Real Estate Target Price: HKD6.30 Market Cap: USD3,051m Price: HKD6.04
Macro Risks 2 Key Takeaways From Zhongshan Visit Growth . 2 0 Value .
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. 02 0 We recently visited Agile’s four major projects in Zhongshan (tier-3 . Agile Property Holdings (3383 HK) 0 Price Close Relative to Hang Seng Index (RHS) city). Reiterate NEUTRAL with a higher HKD6.30 TP (4% upside), 0 7.4 110 following the sector valuation upgrade. Key takeaways: i) a preliminary 0
6.9 104 recovery in sales volume, driven by end-users and loosening mortgage approvals, and ii) ASP tends to stabilise, but upside is limited. We 6.4 98 remain concerned on Agile’s low-tier cities exposure (75% of its
5.9 91 landbank) and profit margin erosion.
5.4 85 Zhongshan the home base. Agile Property (Agile) was founded in
4.9 79 Zhongshan in 1992. It had been headquartered in the city since its establishment, until the headquarters was moved to Guangzhou in 2012. 4.4 73 Zhongshan is the highest contributing city, generating 13.7% and 18.4% 3.9 66 of landbank and contracted sales revenue, respectively, as of end-FY14. In turn, Agile is the market leader in Zhongshan, given that it achieved 3.4 60 250 the highest sales revenue among its peers in 2014. 200
150 Desirable sell-through, but likely an isolated case for Zhongshan. Benefitting from its brand reputation and track record in Zhongshan, 100 Agile’s projects are supported by end-user demand and loosening 50 mortgage approvals from banks. The affordable pricing also helps to
Volm boost sales. As a result, most of the company’s projects achieve high
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- sell-through rates (80-90% of volume launched is sold). However, it
Apr Oct
Jun
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Dec Aug remains to be seen if Agile is able to replicate its popularity in other low- Source: Bloomberg tier cities, especially outside the Guangdong province.
Avg Turnover (HKD/USD) 107m/13.9m Limited property price upside due to inventory pressure. Price cuts Cons. Upside (%) -6.0 were common in 2014 amid the property market downturn. Riding on a sales volume recovery this year, Agile is able to restore the ASP to Upside (%) 4.3 levels before the price cuts. However, similar to other low-tier cities, the 52-wk Price low/high (HKD) 3.80 - 6.92 inventory clearance pressure prevents further ASP upside in the near Free float (%) 37 term. We expect stable property prices going forward. Share outstanding (m) 3,917 Key risks to our forecasts include: i) slower-than-expected contracted Shareholders (%) sales and sales booking; ii) larger-than-expected price cut for sales Chan family 63.0 booking; and iii) higher-than-expected land appreciation tax (LAT).
Maintain NEUTRAL with higher TP of HKD6.30. We maintain our end- FY15F ENAV at HKD14.10/share. Following the sector valuation upgrade, we narrow our NAV discount to 55% (from 65%) for our TP, Share Performance (%) maintaining at about -1SD of its 5-year mean. We raise our TP to YTD 1m 3m 6m 12m HKD6.30 (from HKD4.90). Absolute 37.0 (12.7) 33.3 37.3 1.3 Relative 19.8 (11.0) 20.3 21.3 (18.2) Forecasts and Valuations Dec-13 Dec-14 Dec-15F Dec-16F Dec-17F Total turnover (CNYm) 35,436 38,318 43,370 47,992 54,110 Shariah compliant Reported net profit (CNYm) 4,827 4,287 4,209 4,501 5,164 Recurring net profit (CNYm) 4,400 3,929 4,209 4,501 5,164 Recurring net profit growth (%) (5.1) (10.7) 7.1 6.9 14.7 Toni Ho, CFA +852 2103 5888 Recurring EPS (CNY) 1.28 1.12 1.07 1.15 1.32 [email protected] DPS (CNY) 0.38 0.29 0.26 0.28 0.28
Recurring P/E (x) 3.78 4.31 4.49 4.20 3.66 P/B (x) 0.57 0.49 0.51 0.47 0.42 Dividend Yield (%) 7.8 6.1 5.4 5.7 5.8 Return on average equity (%) 17.6 13.6 11.9 11.6 12.1 Return on average assets (%) 4.7 3.6 3.3 3.2 3.5 Net debt to equity (%) 97.6 96.6 100.9 96.8 93.8 Our vs consensus EPS (adjusted) (%) (2.4) 0.8 (6.5)
See important disclosures at the end of this report Source: Company data, RHB Powered by EFATM Platform 1
Agile Property (3383 HK) 5 June 2015
Zhongshan Property Market In Charts
Figure 1: Contracted ASP Figure 2: MoM change of contracted ASP
(CNY/sqm) 50% Title: Title: 7,000 Source: Source: 40% 6,500 Please fill in the values above to have them entered in your report Please fill in the values above to have them entered in your report 30% 6,000 20% 5,500 10%
5,000 0%
4,500 -10%
4,000 -20% Feb-10 Feb-11 Feb-12 Feb-13 Feb-14 Feb-15 Feb-10 Feb-11 Feb-12 Feb-13 Feb-14 Feb-15
Source: RHB Source: RHB
Figure 3: Monthly contracted sales revenue (YoY change) Figure 4: Monthly contracted sales volume (YoY change)
200% 200% Title: Title: Source: Source:
150% 150% Please fill in the values above to have them entered in your report Please fill in the values above to have them entered in your report
100% 100%
50% 50%
0% 0%
-50% -50% Feb-10 Feb-11 Feb-12 Feb-13 Feb-14 Feb-15 Feb-10 Feb-11 Feb-12 Feb-13 Feb-14 Feb-15
Source: RHB Source: RHB
Figure 5: Yearly sales and completed unsold volume Figure 6: Completed unsold volume as a % to sales volume (m sqm) 9.0 60% Title: Title: Source: Source: 8.0 54.4% 54.7% 55% 7.0 Please fill in the values above to have them52.3% entered in your report Please fill in the values above to have them entered in your report 6.0 50% 47.3% 5.0
4.0 45% 45.2% 3.0 41.6%
2.0 40%
1.0 39.1% 35% 0.0 2007 2008 2009 2010 2011 2012 2013 2014 32.5% 30% Contracted sales volume Completed unsold volume 2007 2008 2009 2010 2011 2012 2013 2014
Source: RHB Source: RHB
See important disclosures at the end of this report 2
Agile Property (3383 HK) 5 June 2015
Projects At a Glance
Figure 7: Details of the projects visited in Zhongshan Project name Metro Agile Zhongshan New Legend Zhongshan Agile Cambridgeshire Agile Gentlefolk Zhongshan Zhongshan 中山雅居樂新城 中山凱茵又一城 中山雅居樂劍橋郡 中山雅居樂御濱名門 Stake (%) 100% 100% 100% 100% Site area (sq m) 1,476,285 509,368 375,357 71,462 Total GFA (sq m) 3,519,253 769,751 1,444,668 142,924 Land bank (sq m, as of end-FY14) 2,141,765 568,574 1,274,585 142,924 Land bank breakdown: - Completed 47,036 55,786 15,324 0 - Under development 622,044 217,214 367,747 142,924 - Held for future development 1,472,685 295,574 891,514 0
Average land cost (CNY/sq m) 194 1,296 601 2,250 Current ASP (CNY/sq m) 5,200 - 6,300 (residential) 5,000 – 5,800 6,200 - 6,500 6,800 - 8,500 (residential) Year of first launch 7,000Early - 15,000 1990s (retails) Dec 2012 Dec 2013 12,000 Dec– 23 ,2014000 (retails) FY14 contracted sales revenue (CNY) approx. 1,800m approx. 1,100m approx. 1,600m approx. 150m
Preliminary FY15 sales target (CNYm) N/A 1,250 1,480 1,030 Year-to-date sales revenue (CNYm) N/A 500 600 300
Unit size 95 - 145 sq m 90 – 187 sq m 90 – 145 sq m 99 – 170 sq m (3 to 4 bedrooms; bareshell) (2 to 5 bedrooms; bareshell) (2 to 4 bedrooms; bareshell) (3 to 5 bedrooms; bareshell) 52 – 112 sq m (1 to 2 bedrooms; decorated) Location *Sanxiang Town (三鄉鎮); *Huoju Development District *Western District *Shiqi Distric (石歧區) *40 min drive away from (火炬开发区); (中山西區博愛一路與翠景南 *Adjacent to Shiqi Qijiang Zhuhai’s Gongbei Port *15 to 20min drive away from 路交匯處) River (石歧區歧江河), close to (拱北口岸) & Jiuzhou Port Zhongshan Port (中山港) & *Within the downtown area, downtown area and schools (九州港碼頭) Intercity Railway station close to commercial malls, (城際輕軌站); schools, hospitals *adjacent to exit of Shenzhen- Zhongshan Tunnel (深中通道出口) Remarks * Phase 15-17 are currently on * Villas are sold out, high-rise * Service apartments are * 5 min drive to city centre sale units are on sale currently on sale * Targeting upgraders, thus * Welcomed by buyers from * Welcomed by buyers from * Intend to hold the most of the buyers apply for HK and Macau, given its close Shenzhen, given its commercial property portion mortgages location to Zhuhai accessibility to Shenzhen for investment, given its through highway premium location Source: Company, RHB
See important disclosures at the end of this report 3
Agile Property (3383 HK) 5 June 2015
Metro Agile Zhongshan (中山雅居樂新城)
Figure 8: Project model Figure 9: Location map
Source: RHB Source: RHB
Figure 10: Interior decoration Figure 11: High-rise blocks under construction
Source: RHB Source: RHB
See important disclosures at the end of this report 4
Agile Property (3383 HK) 5 June 2015
New Legend Zhongshan (中山凱茵又一城)
Figure 12: Project model Figure 13: Location map
Source: RHB Source: RHB
Figure 14: High-rise blocks Figure 15: Landscape
Source: RHB Source: RHB
See important disclosures at the end of this report 5
Agile Property (3383 HK) 5 June 2015
Agile Cambridgeshire Zhongshan (中山雅居樂劍橋郡)
Figure 16: Project model Figure 17: Service apartments block
Source: RHB Source: RHB
Figure 18: Facilities – Outdoor swimming pool Figure 19: Facilities – Indoor rest area and swimming pool
Source: RHB Source: RHB
See important disclosures at the end of this report 6
Agile Property (3383 HK) 5 June 2015
Agile Gentlefolk Zhongshan (中山雅居樂御濱名門)
Figure 20: Project model Figure 21: Location map
Source: RHB Source: RHB
Figure 22: High-rise blocks under construction Figure 23: Scenery
Source: RHB Source: RHB
See important disclosures at the end of this report 7
Agile Property (3383 HK) 5 June 2015
NAV, Valuation And Peer Comparison
Figure 24: Breakdown of Agile's landbank by tier of cities
Overseas Tier-4 Tier-1 1% Title: 6% 7% Source: Tier-2 17% Please fill in the values above to have them entered in your report
Tier-3 69%
Source: RHB
Figure 25: Agile's end-FY15F ENAV Details Total HKDm HKD/share % of Total Landbank and properties under development 95,484 24.4 172% Hotel properties 6,496 1.7 12% Investment properties 4,391 1.1 8% Net debts as of end-FY15F -50,953 (13.0) -92%
Total 55,419 14.10 100%
Source: RHB
Figure 26: Agile's 5-year rolling forward NAV band
Title: 14.0 Source:
Please fill in the values above to have them entered in your report 12.0 +2SD = 25% discount 10.0 +1SD = 36% discount
8.0 Mean = 48% discount
6.0 -1SD = 58%
discount Share Price Share (HKD) -2SD = 70% 4.0 discount
2.0 Jan-10 Jun-10 Nov-10 Apr-11 Sep-11 Feb-12 Jul-12 Dec-12 May-13 Oct-13 Mar-14 Aug-14 Jan-15 Jun-15
Source: RHB
See important disclosures at the end of this report 8
Agile Property (3383 HK) 5 June 2015
Figure 27: Peers valuation Comparison Table I Company Stock Price Mkt cap 3-mth RHB/Cons Dis/(Prem) P/E EPS YoY change 3-yr EPS P/BV Div yield code avg t/o NAV to NAV FY14 FY15F FY16F FY15F FY16F CAGR FY14 FY15F FY14 FY15F (HKD) (USDm) (USDm) (HKD) (%) (x) (x) (x) (%) (%) (%) (%) (%) (%) (%) Agile 3383 HK 6.04 3,052 14.9 14.1 57.2 4.3 5.0 4.8 -13.5 3.5 -0.9 0.6 0.5 7.9 5.8
Large peer average 21.4 9.7 9.0 7.9 7.5 14.7 10.6 1.6 1.3 2.8 3.3 China Overseas 688 HK 28.35 36,061 112.0 34.10 16.9 9.7 8.8 7.7 9.9 14.5 11.6 1.7 1.4 1.7 2.2 China Vanke 2202 HK 19.94 26,897 34.5 22.80 12.5 11.2 9.4 8.1 18.2 16.4 15.7 2.0 1.8 N/A 3.6 CR Land 1109 HK 25.35 22,665 77.1 35.70 29.0 13.5 11.7 10.1 14.8 16.5 14.9 1.5 1.4 1.8 2.2 Evergrande 3333 HK 5.07 10,215 110.9 6.20 18.2 5.0 9.9 8.5 -49.4 16.3 -14.6 1.2 0.7 10.6 5.4 Country Garden 2007 HK 3.60 10,490 35.0 5.17 30.4 6.4 5.9 5.3 7.7 11.3 10.5 1.0 0.9 5.1 5.5 Longfor 960 HK 12.66 9,515 13.0 16.00 20.9 8.4 7.7 6.9 8.1 12.5 11.2 1.2 1.1 2.8 2.8 Shimao 813 HK 16.72 7,490 32.5 30.50 45.2 5.9 5.2 4.7 12.2 10.3 9.1 1.0 0.9 6.6 5.7
Mid-and-small peer average 47.6 9.3 11.4 8.4 -2.2 26.1 10.2 0.8 0.7 3.7 3.9 Sino-Ocean 3377 HK 5.40 5,240 11.6 7.90 31.6 8.9 8.2 7.3 8.5 13.0 10.6 0.8 0.7 4.4 4.9 Sunac 1918 HK 9.08 3,981 26.4 17.60 48.4 6.5 5.5 4.8 18.5 15.5 10.5 1.5 1.2 2.6 3.2 Guangzhou R&F 2777 HK 9.66 4,015 20.3 18.50 47.8 4.5 4.5 4.1 0.4 10.2 7.1 0.7 0.5 N/A 3.5 SOHO China 410 HK 5.24 3,515 6.7 10.00 47.6 12.3 25.0 23.4 -50.6 6.5 -14.6 0.6 0.5 6.0 5.8 Franshion 817 HK 3.06 3,581 7.2 5.50 44.4 7.8 7.7 6.7 1.0 14.1 9.1 0.8 0.7 3.1 3.8 Shenzhen Inv 604 HK 4.57 3,956 16.5 6.60 30.8 8.5 10.0 8.7 -14.6 14.6 14.8 1.0 0.8 3.3 4.0 Agile 3383 HK 6.04 3,052 14.9 14.10 57.2 4.3 5.0 4.8 -13.5 3.5 -0.9 0.6 0.5 7.9 5.8 Yuexiu Property 123 HK 1.86 2,976 14.4 3.70 49.7 10.1 10.1 8.7 0.0 16.2 9.3 0.6 0.6 3.9 4.4 KWG 1813 HK 7.90 3,004 11.0 15.50 49.0 5.6 5.8 4.9 -2.7 19.4 8.4 0.9 0.8 4.6 5.5 Greentown 3900 HK 11.10 3,095 13.1 18.60 40.3 8.8 5.7 5.6 53.6 2.5 19.0 0.8 0.7 4.8 3.4 Shui On Land 272 HK 2.39 2,475 8.8 5.90 59.5 34.1 50.3 14.9 -32.1 236.8 53.9 0.4 0.4 2.6 2.4 Hopson 754 HK 8.25 2,386 4.0 32.80 74.8 9.6 19.6 14.7 -51.2 33.3 N/A 0.3 0.3 N/A 0.0 Poly HK 119 HK 4.21 1,989 16.4 12.90 67.4 11.0 12.6 10.3 -13.0 22.8 2.7 0.5 0.5 5.3 2.0 CIFI 884 HK 2.13 1,859 6.8 4.20 49.3 5.3 4.2 3.4 26.4 24.3 16.9 1.0 0.8 5.2 5.6 COGO 81 HK 4.19 1,234 3.7 8.40 50.1 7.7 4.9 4.0 58.3 22.2 24.4 0.8 0.7 1.2 1.7
Sector average 28.6 9.6 9.7 8.0 4.9 17.8 10.5 1.3 1.1 3.0 3.5 Source: RHB, Bloomberg *Prices as of 4 June
See important disclosures at the end of this report 9
Agile Property (3383 HK) 5 June 2015
Figure 28: Peers valuation Comparison Table II Company Stock Revenue Net profit Gross margin Net margin Net gearing ROE Share price change code FY14 FY15F FY14 FY15F FY14 FY14 FY15F FY14 FY15F FY14 FY15F 1-mth 3-mth (USDm) (USDm) (USDm) (USDm) (%) (%) (%) (%) (%) (%) (%) (%) (%) Agile 3383 HK 6,180 6,727 749 606 32.4 12.1 9.0 88.2 82.6 12.5 10.1 -8.6 35.1
Large peer average 28.9 15.6 12.3 53.6 45.3 20.2 15.3 -11.6 24.9 China Overseas 688 HK 15,479 18,276 3,571 3,676 32.7 23.1 20.1 31.7 11.4 22.8 17.6 -7.7 23.5 China Vanke 2202 HK 22,255 27,718 2,539 3,027 25.1 11.4 10.9 6.3 9.1 19.1 19.2 3.3 19.8 CR Land 1109 HK 11,401 13,509 1,897 1,787 30.6 16.6 13.2 41.5 35.3 16.2 12.8 -6.3 29.5 Evergrande 3333 HK 17,966 20,878 2,732 1,050 28.5 15.2 5.0 102.6 111.7 25.3 9.5 -35.2 50.4 Country Garden 2007 HK 13,636 16,385 1,650 1,670 26.1 12.1 10.2 67.8 41.3 20.3 16.5 -14.1 19.6 Lonfor 960 HK 8,224 8,839 1,347 1,191 26.5 16.4 13.5 61.4 45.0 19.7 15.0 -8.7 27.9 Shimao 813 HK 9,045 10,729 1,307 1,413 32.5 14.5 13.2 63.9 63.1 18.3 16.6 -12.4 3.6
Mid-and-small peer average 29.8 18.7 12.8 77.0 65.1 11.5 10.1 -7.8 32.9 Sino-Ocean 3377 HK 6,273 6,483 741 632 21.0 11.8 9.7 71.0 57.6 11.1 9.1 -15.1 15.1 Sunac 1918 HK 4,044 5,795 520 696 17.3 12.9 12.0 65.4 24.8 21.5 22.6 -12.0 27.5 Guangzhou R&F 2777 HK 5,597 7,614 1,057 886 35.5 18.9 11.6 103.9 113.3 11.5 12.8 -2.1 10.5 SOHO China 410 HK 983 362 658 138 50.5 66.9 38.0 20.3 30.1 10.6 2.2 -11.2 -3.9 Franshion 817 HK 3,812 4,147 683 489 39.1 17.9 11.8 60.9 63.1 17.1 9.7 -4.1 34.8 Shenzhen Inv 604 HK 1,784 1,940 404 329 29.5 22.6 16.9 77.8 N/A 11.2 7.5 10.7 92.0 Agile 3383 HK 6,180 6,727 749 606 32.4 12.1 9.0 88.2 82.6 12.5 10.1 -8.6 35.1 Yuexiu Property 123 HK 2,532 3,129 399 285 26.4 15.7 9.1 79.9 67.6 9.3 6.0 -4.6 25.7 KWG 1813 HK 1,688 2,186 528 516 35.5 31.3 23.6 70.6 50.3 17.1 14.7 -3.5 62.6 Greentown 3900 HK 5,169 5,284 334 561 25.4 6.5 10.6 80.6 78.6 8.5 12.2 9.0 66.2 Shui On Land 272 HK 1,653 1,536 373 47 33.6 22.6 3.1 92.1 80.4 2.8 1.4 -7.4 36.6 Hopson 754 HK 2,199 1,269 380 108 30.8 17.3 8.5 75.7 N/A 5.4 2.0 -17.3 32.4 Poly HK 119 HK 3,678 4,036 120 155 19.8 3.3 3.8 120.3 101.4 3.1 4.0 -14.4 19.3 CIFI 884 HK 2,609 3,337 306 401 25.9 11.7 12.0 58.4 45.4 19.8 21.6 -16.8 33.1 COGO 81 HK 1,804 2,207 163 269 24.1 9.1 12.2 90.4 51.1 10.7 16.1 -19.0 5.8
Average 29.5 17.7 12.6 69.6 58.2 14.3 11.8 -9.0 30.3 Source: RHB, Bloomberg *Prices as of 4 June
See important disclosures at the end of this report 10
Agile Property (3383 HK) 5 June 2015
Financial Exhibits
Profit & Loss (CNYm) Dec-13 Dec-14 Dec-15F Dec-16F Dec-17F Total turnover 35,436 38,318 43,370 47,992 54,110 Cost of sales (22,822) (25,887) (29,934) (33,235) (36,410) Gross profit 12,614 12,431 13,437 14,756 17,699 Gen & admin expenses (1,285) (1,784) (1,952) (2,112) (2,381) Selling expenses (1,523) (1,437) (1,530) (2,133) (2,453) Operating profit 9,806 9,209 9,955 10,512 12,866 Operating EBITDA 10,001 9,496 10,360 10,956 13,347 Depreciation of fixed assets (195) (287) (405) (444) (482) Operating EBIT 9,806 9,209 9,955 10,512 12,866 Net income from investments (53) (73) 181 269 327 Interest income 99 86 142 118 131 Interest expense (412) (293) (670) (704) (717) Exchange gains 558 (202) - - - Exceptional income - net 372 1,398 - - - Pre-tax profit 10,370 10,126 9,608 10,195 12,607 Taxation (4,850) (5,035) (4,746) (4,927) (6,259) Minority interests (693) (804) (653) (768) (1,183) Profit after tax & minorities 4,827 4,287 4,209 4,501 5,164 Reported net profit 4,827 4,287 4,209 4,501 5,164 Recurring net profit 4,400 3,929 4,209 4,501 5,164 Source: Company data, RHB
Cash flow (CNYm) Dec-13 Dec-14 Dec-15F Dec-16F Dec-17F Operating profit 9,806 9,209 9,955 10,512 12,866 Depreciation & amortisation 195 287 405 444 482 Change in working capital (96) (4,903) 5,985 5,107 2,779 Other operating cash flow 40 1,196 - - - Operating cash flow 9,945 5,789 16,345 16,064 16,126 Interest paid (2,520) (3,724) (4,466) (4,690) (4,780) Tax paid (4,343) (4,951) (5,111) (4,968) (5,282) Cash flow from operations 3,082 (2,885) 6,769 6,406 6,064 Capex (14,445) (7,415) (6,700) (7,200) (7,200) Other new investments (1,919) 42 - - - Other investing cash flow (100) 86 142 118 131 Cash flow from investing activities (16,464) (7,287) (6,558) (7,082) (7,069) Dividends paid (1,154) (1,298) (863) (1,028) (1,274) Proceeds from issue of shares - 1,653 - - - Increase in debt 15,314 9,727 4,000 4,000 4,000 Other financing cash flow 351 (626) (327) (384) (592) Cash flow from financing activities 14,511 9,456 2,810 2,588 2,134 Cash at beginning of period 5,749 6,784 6,068 9,089 11,000 Total cash generated 1,129 (716) 3,021 1,912 1,129 Forex effects (94) - - - - Implied cash at end of period 6,784 6,068 9,089 11,000 12,129
Source: Company data, RHB
See important disclosures at the end of this report 11
Agile Property (3383 HK) 5 June 2015
Financial Exhibits
Balance Sheet (CNYm) Dec-13 Dec-14 Dec-15F Dec-16F Dec-17F Total cash and equivalents 13,034 11,430 14,451 16,362 17,491 Accounts receivable 12,425 11,675 12,266 12,887 13,539 Other current assets 56,526 71,078 77,763 83,426 90,326 Total current assets 81,985 94,183 104,480 112,675 121,357 Total investments 6,882 7,098 7,001 7,270 7,597 Tangible fixed assets 25,176 19,647 20,050 20,805 21,524 Total other assets 491 2,720 2,720 2,720 2,720 Total non-current assets 32,549 29,465 29,771 30,795 31,841 Total assets 114,534 123,648 134,250 143,470 153,197 Short-term debt 12,354 16,471 14,667 14,667 14,667 Accounts payable 19,525 17,333 18,211 19,133 20,101 Other current liabilities 16,937 21,582 18,846 19,288 19,564 Total current liabilities 48,816 55,386 51,724 53,087 54,333 Total long-term debt 29,132 30,334 40,546 44,546 48,546 Other liabilities 4,505 1,316 1,569 1,569 1,569 Total non-current liabilities 33,637 31,650 42,115 46,115 50,115 Total liabilities 82,453 87,036 93,839 99,202 104,448 Share capital 363 400 400 400 400 Other reserves 29,003 33,251 36,791 40,265 44,155 Shareholders' equity 29,366 33,651 37,192 40,665 44,555 Minority interests 2,715 2,961 3,219 3,603 4,195 Other equity - - (0) - - Total equity 32,081 36,612 40,411 44,268 48,750 Total liabilities & equity 114,534 123,648 134,250 143,470 153,197 Source: Company data, RHB
Key Ratios (CNY) Dec-13 Dec-14 Dec-15F Dec-16F Dec-17F Revenue growth (%) 18.5 8.1 13.2 10.7 12.7 Operating profit growth (%) (5.1) (6.1) 8.1 5.6 22.4 Net profit growth (%) (3.5) (11.2) (1.8) 6.9 14.7 EPS growth (%) (3.5) (12.7) (12.1) 6.9 14.7 BVPS growth (%) 15.5 14.6 (2.7) 9.3 9.6 Operating margin (%) 27.7 24.0 23.0 21.9 23.8 Net profit margin (%) 13.6 11.2 9.7 9.4 9.5 Return on average assets (%) 4.7 3.6 3.3 3.2 3.5 Return on average equity (%) 17.6 13.6 11.9 11.6 12.1 Net debt to equity (%) 97.6 96.6 100.9 96.8 93.8 DPS 0.38 0.29 0.26 0.28 0.28 Recurrent cash flow per share 0.89 (0.82) 1.73 1.64 1.55
Source: Company data, RHB
See important disclosures at the end of this report 12
Agile Property (3383 HK) 5 June 2015
SWOT Analysis
Solid presence and well-established brand reputation The prevailing in Guangdong and Hainan provinces anti-corruption campaign may Low land cost among peers put pressure on the sector
The industry is supported by an environment of favourable and loosening monetary policies Anticipated valuation recovery amid a sector turnaround
Price cuts on some slow-moving projects may pressure its performance Needs time to regain confidence following investigations on its chairman
P/E (x) vs EPS growth P/BV (x) vs ROAE
5.0 25% 0.7 25% 4.5 21% 0.6 21% 4.0 17% 3.5 13% 0.5 18%
3.0 9% 0.4 14% 2.5 5% 2.0 1% 0.3 11% 1.5 -3% 0.2 7% 1.0 -7% 0.1 4% 0.5 -11%
0.0 -15% 0.0 0%
13 14 15 16 17 16 17 13 14 15
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Jan Jan Jan Jan Jan Jan Jan Jan Jan Jan
P/E (x) (lhs) EPS growth (rhs) P/B (x) (lhs) Return on average equity (rhs)
Source: Company data, RHB Source: Company data, RHB
Company Profile Agile Property was founded in 1992. It is principally engaged in the development of large-scale complex property projects, together with hotel operations, property investment and management. Riding on over 20 years of property development experience, Agile established a solid presence and reputation in Guangdong province (mainly Zhongshan, Guangzhou and Foshan) and expanded to various regions across China. Agile moved its headquarters from Zhongshan to Guangzhou in 2012, and also expanded its presence to Malaysia. It has a landbank with a total GFA of over 42m sq m.
See important disclosures at the end of this report 13
Agile Property (3383 HK) 5 June 2015
Recommendation Chart
Price Close
15 Recommendations & Target Price
7 7 9 4 8 4 4
. . . . .
na
9 6 7 4 4.9
11.1 11.1 10 13 11.4
11
9
7
5
3 Buy Neutral Sell Trading Buy Take Profit Not Rated Jun-10 Sep-11 Dec-12 Mar-14
Source: RHB, Bloomberg
Date Recommendation Target Price Price 2015-03-26 Neutral 4.9 4.4 2015-03-05 Neutral 4.9 4.5 2014-10-13 Buy 4.8 4.0 2014-09-23 Buy 7.4 5.4 2014-08-27 Buy 7.4 6.3 2014-07-17 Buy 6.9 5.6 2014-03-31 Buy 9.7 6.4 2014-01-28 Buy 9.7 7.2 2013-10-30 Buy 11.1 9.2 2013-08-16 Buy 10.4 8.6
Source : RHB, Bloomberg
See important disclosures at the end of this report 14
RHB Guide to Investment Ratings
Buy: Share price may exceed 10% over the next 12 months Trading Buy: Share price may exceed 15% over the next 3 months, however longer-term outlook remains uncertain Neutral: Share price may fall within the range of +/- 10% over the next 12 months Take Profit: Target price has been attained. Look to accumulate at lower levels Sell: Share price may fall by more than 10% over the next 12 months Not Rated: Stock is not within regular research coverage
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