股 票 研 [Table_Title] Van Liu 刘斐凡 Company Report: Country Garden (02007 HK) 究 (86755) 2397 6672 Equity Research 公司报告： 碧桂园 (02007 HK) [email protected] 27 March 2019 Speed[Table_Summary Shifting] to a Lower Gear but Quality is Improving, Maintain "Accumulate" 速度换低档速但质量提升，维持“收集” 公 司 2018 underlying net profit was in line with our expectation. Top line Rating:[Table_Rank] Accumulate increased by 67.1% YoY to RMB379,079 mn in 2018. Underlying net profit Maintained 报 elevated 31.4% YoY to RMB33,864 mn. 告 评级： 收集 (维持) Contracted sales will sustainably grow but at a slower rate. We estimate Company Report that saleable resources in 2019 may reach over RMB780.2 bn. We estimate sale-through rate to decrease to below 70.0% in 2019 to factor in declining 6[Table_Price]-18m TP 目标价 : HK$13.61 demand in lower-tier cities. Revised from 原目标价: HK$12.28 We expect stable gross margins and healthy net gearing ratio. We Share price 股价: HK$11.960 estimate that the Company’s unit land cost was less than RMB2,742 per 告 sq.m., 32.6% of ASP during Jan.-Feb. 2019. We expect net gearing ratio to 证 报 be no higher than 56.4% during the same period. Stock performance 券 股价表现 究 With slower contracted sales growth, we think the Company should justify a 研 higher NAV discount than our previous expectations. Nevertheless, as we [Table_QuotePic] 研 究 revise up the underlying net profit, we revise up the Company’s target price 券 from HK$12.28 to HK$13.61, which represents a 40% discount to the 报 Company’s 2019E NAV of HK$22.68 per share, 6.1x underlying 2019 PER 告 证 and 1.5x 2019 PBR. We maintain "Accumulate". Risks: (1) Equity Research Report lower-than-expected contracted sales and (2) ASP slashing in lower-tier cities. 2018 年核心净利符合预期。2018 年总收入同比增长 67.1%到人民币 3,790.79 亿元。核心 [Tab 净利同比增 31.4%到人民币 338.64 亿元。 le_I 合约销售将以较低的速率持续增长。我们预测 2019 年的可售货源为人民币 7,802 亿元。 nfo1 我们测算 2019 年的去化率将下降至 70.0%以下以反映低线城市的需求下降。 我们预计稳定的毛利率和健康的净资产负债率。我们测算公司单位土地成本低于人民币 Change[Table_PriceChange] in Share Price 1 M 3 M 1 Y ] 房 2,742 元每平米，为 2019 年 1-2 月销售均价的 32.6%。我们预计净资产负债率在同期不会 股价变动 1 个月 3 个月 1 年 高于 56.4% Abs. % 地 绝对变动 % 14.3 34.5 (24.6) 产 基于放缓的合约销售增速，我们认为公司应适用一个较我们早前预期更高的每股净资产折 Rel. % to HS Index 相对恒指变动 % 15.0 22.4 (17.4) 行 让。然而，由于我们上调了核心净利，我们将目标价从 12.28 港元上调至 13.61 港元，相 Avg. Share price(HK$) 平均股价（港元） 15.0 15.6 11.6 业 当于较 22.68 港元的 2019 年每股净资产有 40%的折让，也分别相当于 6.1 倍 2019 年核心 Source: Bloomberg, Guotai Junan International. Property Sector 市盈率和 1.5 倍 2019 年市净率。我们维持“收集”。风险：（1）低于预期的房屋销售和（2） 低线城市房价下滑。 [Tab le_I Y[Table_ear End Turnover Net Profit EPS EPS PER BPS PBR DPS Yield ROE Profit] nfo2 年结 收入 股东净利 每股净利 每股净利变动 市盈率 每股净资产 市净率 每股股息 股息率 净资产收益率 12/31 (RMB m) (RMB m) (RMB) (△ %) (x) (RMB) (x) (RMB) (%) (%) ] 2017A 226,900 26,064 1.225 135.1 8.1 4.413 2.3 0.407 4.1 31.8 2018A 379,079 34,618 1.552 26.7 6.8 5.651 1.9 0.493 4.7 32.2 碧 2019F 460,170 41,237 1.920 23.7 5.3 7.769 1.3 0.587 5.8 28.6 桂 2020F 538,807 48,477 2.258 17.6 4.5 10.258 1.0 0.690 6.8 25.0 园 2021F 624,402 54,961 2.560 13.4 4.0 13.081 0.8 0.782 7.7 21.9 [Table_BaseData]Shares in issue (m) 总股数 (m) 21,647.7 Major shareholder 大股东 Yang Huiyan 57.2% Market cap. (HK$ m) 市值 (HK$ m) 258,906.5 Free float (%) 自由流通比率 (%) 42.8 3 month average vol. 3 个月平均成交股数 (‘000) 48,659.1 FY19 Net gearing (%) FY19 净负债/股东资金 (%) 56.4 Country HK) Garden (02007 52 Weeks high/low (HK$) 52 周高/低 (HK$) 16.920 / 7.710 FY19 Est. NAV (HK$) FY19 每股估值（港元） 22.7 Source: the Company, Guotai Junan International. See the last page for disclaimer Page 1 of 8 [Table_PageHeader]Country Garden (02007 HK) The property sector will face headwinds in sales and investment in 2019. During Jan.-Feb. 2019, YoY increase in commodity house sales increased 0.1 ppts compared to that during Jan.-Nov. 2018. Investment] 1 r maintaineda M t h ag steadyi R _ YoYe growthl b a T [ rate. Moreover, land area sold recorded rapid YoY growth of 14.2% during the same period. Sources of funds for real estate development enterprises recorded moderate YoY growth of 6.4%. However, sales and investment in 2019 is expected to be lower riding on still tightening external environment and high leverage ratio of residents accompanied with escalating downside pressure on the economy. Figure 1: Cumulative House Sales Amount in China Figure 2: Cumulative House Sales GFA in China 27 March 2019 16,000 70.0% 1,800 45.0% 14,000 60.0% 1,600 40.0% 35.0% 12,000 50.0% 1,400 30.0% 10,000 40.0% 1,200 25.0% 1,000 8,000 30.0% 20.0% 800 15.0% 6,000 20.0% 600 10.0% 5.0% 4,000 10.0% 400 0.0% 2,000 0.0% 200 -5.0% 0 -10.0% 0 -10.0% 15 15 16 16 17 17 18 18 15 15 16 16 17 17 18 15 16 17 18 16 17 18 - - - - - - - - - - - - - - - - - - - - - - Apr Oct Apr Oct Apr Oct Apr Oct Jun Jun Jun Jun Feb Feb Feb Aug Dec Aug Dec Aug Dec Aug Amount Sold of Commodity Houses (LHS)(RMB bn) GFA Sold of Commodity Houses (LHS)(sq.m. mn) Amount Sold of Residential Houses (LHS) (RMB bn) GFA Sold of Residential Houses (LHS) (sq.m. mn) ] 2 r a M t h g i R _ e l b a T [ Amount Sold YTD YoY of Commodity Houses (RHS) GFA Sold of Commodity Houses (RHS) Amount Sold YTD YoY of Residential Houses (RHS) GFA Sold of Residential Houses (RHS) Source: National Bureau of Statistics of China, Guotai Junan International. Source: National Bureau of Statistics of China, Guotai Junan International. Figure 3: Key Property Development and Sales Data 30.0% 15.8% 20.0% 1.0% 22.5% 7.0% 12.0% 6.5% 8.1% 13.0% 1.0% 10.0% 7.7% 6.0% 10.5% 6.9% 7.0% 0.0% -7.6% 2014 2015 2016 2017 2018F 2019F -10.0% -4.4% -2.0% -10.7% -14.0% -14.0% -7.8% -8.7% (02007 HK) -20.0% -3.4% -31.7% -30.0% 碧桂园 -40.0% GFA Newly Started YTD YoY Land Area Sold YTD YoY Investment YTD YoY GFA Sold of Commodity Houses Source: National Bureau of Statistics of China, Guotai Junan International. Country Garden 2018 underlying net profit was in line with our expectation. Top line increased by 67.1% YoY to RMB379,079 mn in 2018 due to strong contracted sales growth, strict construction management control and timely delivery of units. Gross profit amounted to RMB102,476 mn, surging up 74.3% YoY. Riding on higher proportion of minority interests, net profit rose 32.8% YoY to RMB34,618 mn, which was in line with our expectation. If we exclude after-tax fair value gains on IP and exchange losses, underlying net profit increased 31.4% YoY to RMB33,864 mn, which was also in line with our expectation. The Company recorded gross margin gain of 1.1 ppts YoY due to elevating ASP. Underlying net profit margin decreased 2.4 ppts YoY to 8.9%. Net gearing ratio decreased by 7.4 ppts YoY riding on slower expansion of inventories. Cash balance also dramatically increased 63.4% YoY to RMB779,087 mn given total debt expansion and rising cash collection. Report Company See the last page for disclaimer Page 2 of 8 [Table_PageHeader]Country Garden (02007 HK) Table 1: Comparison of the Company’s Balance Sheet and Income Statement in 2017 and 2018 RMB mn 2017A ] 1 2018Ar a M t h g i R _ Changee l b a T [ Total revenue 226,900 379,079 67.1% Gross Profit 58,785 102,476 74.3% GPM 25.9% 27.0% 1.1 ppts Net Profit (Inc. after-tax fair value gains on IP) 26,064 34,618 32.8% Net Profit (Ex. after-tax fair value gains on IP) 25,781 33,864 31.4% NPM (Inc. after-tax fair value gains on IP) 11.5% 9.1% -2.4 ppts 27 March 2019 NPM (Ex. after-tax fair value gains on IP) 11.4% 8.9% -2.4 ppts DPS (RMB cent) 40.7 49.3 21.2% Underlying EPS (RMB cent) 122.8 161.2 31.3% Total Cash on Hand 148,402 242,543 63.4% Total Asset 1,049,669 1,629,694 55.3% Properties for Sale 487,649 779,087 59.8% Total Debt 197,951 296,460 49.8% Shareholders' equity 93,671 121,330 29.5% ROE 31.8% 32.2% 0.4 ppts ] 2 r a M t h g i R _ e l b a T [ Net Gearing Ratio 56.9% 49.6% -7.4 ppts Source: the Company, Guotai Junan International. We expect housing demand in lower-tier cities to turn weak, which will weigh on the Company's attributable contracted sales in 2019.