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China Property Weekly Digest (Issue No China / Hong Kong Industry Focus China Property Weekly Digest (Issue No. 304) Refer to important disclosures at the end of this report DBS Group Research . Equity 27 May 2020 Sales growth kept picking up HSI: 23,385 • Inventory levels of key Tier 1/2 cities stabilised on a w-o-w basis • MTD average weekly GFA sold in 27 cities we track was 4.3% higher than May-19 ANALYST • Average sell-through rate in key Tier 1 and 2 cities picked up to 71% Jason LAM +852 36684179 [email protected] Danielle WANG CFA, +852 36684176 [email protected] • Top picks: Shimao (813 HK), Yuzhou (1628 HK) and China Aoyuan (3883 HK) Ken HE CFA, +86 2138968221 [email protected] Weekly sales performance (May 18 – 24) New launches in 10 major cities and sell-through rate Inventory in key cities MTD vs Avg MTD vs same 30 k units Total units launched (LHS) 150% 100.0 w-o-w of May -19 period May-19 25 Sell-through rate (RHS) 80.0 26w avg 60.0 Avg weekly GFA sold ↑ 19.9% ↓ 2.3% ↑ 4.3% 20 100% 15 40.0 Inventory (no. of weeks) ↑ 0.4 20.0 10 50% 0.0 5 YTD vs same 0 0% Jul-13 Jul-18 Jan-11 Jan-16 Jun-11 Jun-16 Feb-13 Oct-14 Feb-18 Oct-19 Apr-12 Sep-12 Apr-17 Sep-17 Dec-13 Dec-18 Nov-11 Nov-16 Mar-15 Mar-20 Aug-15 May-14 period 2019 YTD vs 2019 May-19 7W17 2W18 1W19 9W19 51W16 15W17 23W17 31W17 39W17 47W17 12W18 20W18 28W18 36W18 45W18 17W19 25W19 33W19 41W19 49W19 12W20 YTD GFA sold ↓ 20.5% ↓ 31.7% 20W20 Inventory (no. of weeks) 26 weeks rolling avg Project launches in key Tier 1/2 cities Average short selling interest as % of trading volume Overall southbound shareholding in CCASS No, of project launches 30% No. of shares (bn) 20 9,000 20% 10 8,000 0 10% 7,000 6,000 0% Tianjin Beijing 5,000 Wuhan Nanjing Shanghai Chengdu Shenzhen Hangzhou Chongqing Jul-17 Jul-18 Jul-19 Guangzhou Jan-17 Jan-18 Jan-19 Jan-20 Sep-17 Sep-18 Sep-19 Nov-17 Nov-18 Nov-19 Mar-17 Mar-18 Mar-19 Mar-20 Jul-17 Jul-18 Jul-19 May-17 May-18 May-19 May-20 Jan-18 Jan-19 Jan-20 Sep-17 Sep-18 Sep-19 Nov-17 Nov-18 Nov-19 Mar-17 Mar-18 Mar-19 Mar-20 May-17 May-18 May-19 21W20 20W20 May-20 Sector one month moving average Source: CREIS, Fang.com, Bloomberg Finance L.P., Thomson Reuters, DBS Bank (Hong Kong) Limited (“DBS HK”) ed-JS/ sa-CS / AH Industry Focus China Property Weekly Digest YTD share price performances Average short-selling interests (May 18 - 22) w-o-w % change of southbound shareholding SRE China Vanke COLI Sino-Ocean Sector Average: 10% BJ Cap Land Sector Average: -21% China South City Times China GZ R&F Poly (Hong Kong) Longfor Sunac Agile BJ North Star 'H' CR Land Ying Li Yuexiu Property Shimao BJ North Star Evergrande Greenland CIFI China SCE Powerlong Hopson China South City Vanke Greentown Sunac Shui On Land CIFI Holdings SOHO Glorious C Garden Road King China South City Road King Shui On Land Kaisa CR Land COGO Shenzhen Inv Greentown Yuzhou COGO SZI Country Garden Yuexiu BJ Cap Land 'H' Shui On Land Minmetals Sino-Ocean Land Poly HK Evergrande Kaisa Sunac China Logan Small caps Kaisa Group COLI Poly HK Greenland HK Guangzhou R&F Shenzhen Inv CIFI Times China Mid caps Yuexiu HSI Index Yuzhou Properties Sino-Ocean Greentown Longfor COGO Large caps Shimao Property Powerlong BJ North Star Yanlord Soho China Vanke Lai Fung CR Land Longfor China Aoyuan SOHO China SCE Powerlong Zhong An Logan Property CC Land Greenland HK Hopson KWG Property Yuzhou KWG China Vanke 'H' Shimao China SCE China Overseas -60% -50% -40% -30% -20% -10% 0% 10% 20% KWG Agile Property Country Garden Road King Evergrande Agile 0% 5% 10% 15% 20% 25% 30% 35% -15% -10% -5% 0% 5% Source: Bloomberg Finance L.P., Thomson Reuters, DBS Bank (Hong Kong) Limited (“DBS HK”) Page 2 Industry Focus China Property Weekly Digest Valuation comparison 3-mth daily Net Dis c/ 26-May Mkt trading 12-m EPS gth PE PE Yield Yield ROE ROE Gearing P/Bk NAV (Prem) Price Cap value Recom target 20F 21F 20F 21F 20F 21F 20F 21F FY19A 20F to NAV Company Name Code HK$ US$bn US$m HK$ % % x x % % % % % x HK$ % Large cap China Overseas* 688 HK 24.40 34.5 64.3 BUY 29.50 10 12 6.7 6.0 4.3 5.0 12.0 12.2 32.7 0.8 39.0 37.4 CR Land* 1109 HK 30.30 27.9 68.7 BUY 35.00 11 15 8.1 7.1 4.3 5.0 13.0 13.4 36.2 1.0 44.5 31.9 China Vanke 'H'* 2202 HK 25.20 40.3 31.0 BUY 36.16 13 12 5.7 5.1 6.0 6.8 22.2 21.4 34.3 1.2 31.1 18.9 Country Garden* 2007 HK 9.60 27.1 38.8 BUY 13.65 9 9 4.3 4.0 7.0 7.6 26.8 24.4 46.3 1.1 18.2 47.3 Evergrande* 3333 HK 16.92 28.9 48.6 BUY 14.30 15 15 7.3 6.3 6.9 7.9 18.5 19.3 159.3 1.3 45.8 63.0 Longfor* 960 HK 34.45 26.6 40.3 BUY 33.00 26 21 9.4 7.8 4.8 5.8 20.6 22.1 51.0 1.8 38.0 9.4 Shimao Property* 813 HK 33.90 15.5 38.0 BUY 30.03 22 21 8.0 6.6 5.0 6.0 18.2 19.7 63.9 1.4 37.0 8.3 Sunac China 1918 HK 32.50 19.5 138.4 NR n.a. 11 21 4.5 3.7 4.9 6.1 27.1 26.9 179.1 1.1 n.a. n.a. Average 15 16 6.7 5.8 5.4 6.3 19.8 19.9 75.4 1.2 30.9 Mid cap Agile Property* 3383 HK 8.14 4.1 10.4 BUY 11.10 12 17 3.5 3.0 12.8 15.0 15.0 16.1 130.7 0.5 14.9 45.3 China Aoyuan* 3883 HK 8.66 3.0 12.8 BUY 14.42 57 25 3.3 2.6 10.6 13.3 37.7 37.0 74.9 1.1 n.a. n.a. CIFI Holdings 884 HK 5.53 5.6 16.5 NR n.a. 27 22 4.9 4.0 7.3 8.9 23.8 24.5 78.9 1.1 n.a. n.a. Seazen 1030 HK 6.94 5.3 14.6 NR n.a. 7 15 4.5 3.9 6.8 8.0 26.7 24.0 38.5 1.1 n.a. n.a. Guangzhou R&F 2777 HK 9.46 1.6 18.7 NR n.a. 4 17 2.8 2.4 14.7 16.6 14.6 14.9 198.9 0.4 n.a. n.a. KWG Property 1813 HK 11.36 4.7 13.4 NR n.a. (35) 22 5.2 4.2 8.3 10.3 18.6 20.1 75.4 0.8 n.a. n.a. Logan Property* 3380 HK 11.88 8.4 9.4 BUY 14.59 21 26 5.3 4.2 7.6 9.5 31.8 33.0 77.1 1.5 16.3 27.0 Shenzhen Inv 604 HK 2.44 2.8 2.1 NR n.a. (12) 3 5.8 5.6 7.7 7.7 8.0 8.4 24.7 0.5 n.a. n.a. Sino-Ocean Land 3377 HK 1.82 1.8 2.7 BUY 6.68 5 25 4.6 3.6 10.3 12.2 6.9 6.5 76.7 0.2 8.9 n.a. Times China* 1233 HK 11.52 2.9 11.8 BUY 19.05 15 21 3.2 2.7 9.9 11.9 30.0 29.4 67.2 0.8 24.2 52.3 Yuexiu Property* 123 HK 1.39 2.8 3.3 BUY 2.25 6 21 5.0 4.1 8.0 n.a. 9.5 n.a. 74.0 0.5 3.2 56.0 Average 10 20 4.6 3.9 9.1 10.9 20.0 21.0 83.3 0.8 44.4 ^ Denominated in SGD for price, ~ Simple average discount to NAV; Market cap weighted average NAV = 34%, # Exclude outliners ~~Gross Gearing, ^^ FY20: FY21; FY21: FY22 Source: Thomson Reuters, *DBS HK Page 3 Industry Focus China Property Weekly Digest Valuation comparison 3-mth daily Net Dis c/ 26-May Mkt trading 12-m EPS gth PE PE Yield Yield ROE ROE Gearing P/Bk NAV (Prem) Price Cap value Recom target 20F 21F 20F 21F 20F 21F 20F 21F FY19A 20F to NAV Company Name Code HK$ US$bn US$m HK$ % % x x % % % % % x HK$ % Small cap BJ Cap Land 'H' 2868 HK 1.41 0.2 1.3 NR n.a.
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