CEBI Research China Property Sector Report ─ China Property Fine tuning policy yet to boost sales volume ñ Housing policy shows signal of relaxation especially after Local’s Dominic Chan Two sessions Senior Equity Analyst ñ Debt financing surged with lower funding cost in Jan 2019,
[email protected] reflecting a loose credit conditions. (852) 2916-9631 ñ Relatively stable in RMB currency YTD ñ Chinese property companies met its 2018 sales target, but home sales growth is likely to slow down in 2019 27 Feb 2019 ñ Maintain our bullish view on COLI (688 HK) and Logan Property (3380 HK) More fine tuning policies to come: China property sector continued to rebound in 2019. During the working conference held by Ministry of Housing and Urban-Rural Development of China by the end of 2018, the ministry highlighted 10 key tasks in 2019, including stabilize home and land prices in 2019. Meanwhile, more cities announced fine-tuning policies on property market, we expect more to come in the near future. Debt refinancing surged by 90% in Jan2019: As per our Key Data previous report, debt repayment for China property companies Avg.19 E P/E (x) 5.88 Avg.19E P/B (x) 1.32 will soar from 2019 to 2021. However, China property succeed to Avg.18 E Dividend Yield (%) 5.20 raise money by debt refinancing in recent months. According to Source: Bloomberg, CEBI the data of CRIC,the amount of debt issuance in Jan2019 was Rmb109.6bn, surged by 91.8% MoM. RMB appreciated against US dollars: As developers are Sector Performance (%) having a high level of foreign-denominated debt, RMB 1-mth 7.6 depreciation will weigh on their profitabilities and cash flows.