China / Hong Kong Industry Focus China Property Weekly Digest (Issue No. 349) Refer to important disclosures at the end of this report DBS Group Research. Equity 2 June 2021 HSI: 29,468 Chengdu imposed control over secondary home price • Chengdu has introduced indicative secondary home prices for 201 residential projects in the city, and demands ANALYST immediate removal of all secondary houses for sale with asking prices exceeding guidance Jason LAM +852 36684179 [email protected] Danielle WANG CFA, +852 36684176 [email protected] • YTD average weekly GFA sold for 28 cities we track rose 16.2% as compared to 2020's full-year weekly average Ken HE CFA, +86 2138968221 [email protected] • Southbound shareholding interests moderated to 5.98% Tony SHI [email protected] • Sector top picks: CR Land (1109 HK), Vanke (2202 HK) and Logan (3380 HK) Weekly sales performance (May 24 – May 30) New launches in 10 major cities and sell-through rate Inventory in key cities MTD vs Avg of MTD vs same 30 k units Total units launched (LHS) 150% 100.0 w-o-w May-20 period May-20 80.0 Sell-through rate (RHS) 60.0 Avg weekly GFA sold ↑ 2.2% ↑ 8.5% ↑ 8.5% 20 100% 40.0 Inventory (no. of weeks) ↓ 0.7 20.0 10 50% 0.0 YTD vs same period 2020 YTD vs 2020 Jul-13 0 0% Jul-18 Jan-11 Jan-16 Jan-21 Jun-11 Jun-16 Jun-21 Oct-14 Oct-19 Apr-12 Apr-17 Feb-13 Feb-18 Sep-12 Sep-17 Aug-15 Aug-20 Dec-13 Dec-18 Nov-11 Nov-16 Mar-15 Mar-20 May-14 YTD GFA sold ↑ 62.3% ↑ 16.2% May-19 Inventory (no. of weeks) 26 weeks rolling avg 1W18 7W19 14W18 10W17 21W17 32W17 43W17 25W18 36W18 48W18 18W19 29W19 40W19 51W19 17W20 28W20 39W20 50W20 10W21 21W21 51W16 Project launches in key Tier 1/2 cities Average short selling interest as % of trading volume Overall southbound shareholding in CCASS 30% No of project launches Southbound holding % 20 20% 6.5% 10 6.0% 5.5% 0 10% 5.0% 4.5% 0% 4.0% Tianjin Beijing 3.5% Wuhan Nanjing Chengdu Shanghai 3.0% Shenzhen Hangzhou Chongqing Guangzhou Jun-17 Jun-18 Jun-19 Jun-20 Jun-21 Oct-17 Oct-18 Oct-19 Oct-20 Apr-17 Apr-18 Apr-19 Apr-20 Apr-21 Feb-18 Feb-19 Feb-20 Feb-21 Aug-17 Aug-18 Aug-19 Aug-20 Dec-17 Dec-18 Dec-19 Dec-20 Jul-18 Jul-19 Jul-17 Jul-20 Jan-21 Jan-19 Jan-20 22W21 21W21 Jan-18 Sep-19 Sep-18 Sep-20 Sector one month moving average Sep-17 Nov-17 Nov-18 Nov-19 Nov-20 Mar-20 Mar-17 Mar-18 Mar-19 Mar-21 May-17 May-21 May-19 May-20 May-18 Source: CREIS, Fang.com, Bloomberg Finance L.P., Thomson Reuters, DBS Bank (Hong Kong) Limited (“DBS HK”) ed-JS/ sa-CS / JY Industry Focus China Property Weekly Digest YTD share price performances Average short-selling interests (May 24 – May 28) w-o-w % change of southbound shareholding China Vanke Sector Average: 13% Powerlong Greenland Central China BJ Cap Land 'H' Longfor Soho China Agile Shui On Land CR Land COGO SOHO China SCE Sunac China Sunac Kaisa Group Shenzhen Inv China Jinmao Hldgs Vanke Sino-Ocean Land China Jinmao China Vanke 'H' Greentown Central China Evergrande China Overseas Road King Greentown KWG Agile Property Shimao Longfor Powerlong BJ North Star Guangzhou R&F COGO CIFI Holdings GZ R&F Poly (Hong Kong) Poly HK Evergrande China South City Shimao Group Sino-Ocean CR Land Shui On Land Yuzhou Properties China Aoyuan Logan Group KWG Property Greenland HK Country Garden CIFI Shenzhen Inv Kaisa Logan 0% 10% 20% 30% 40% Country Garden China SCE Yuzhou -6% -4% -2% 0% 2% 4% 6% 8% 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 Disc/ 1- Jun Mkt trading 12- m EPS gth PE PE Yield Yield R OE R OE Gearing P/Bk NAV (Prem) Price Cap value R ecom target 21F 22F 21F 22F 21F 22F 21F 22F 2020A 21F to NAV Company Name Code HK$ US$bn US$m HK$ % % x x % % % % % x HK$ % Large cap China Overseas* 688 HK 18.52 26.1 56.4 BUY 25.70 13 12 4.1 3.7 7.3 8.2 12.1 12.4 31.2 0.5 38.8 52.2 CR Land* 1109 HK 36.70 33.7 54.3 BUY 49.60 14 10 7.9 7.2 4.7 5.1 12.3 12.3 29.5 1.0 62.7 41.4 China Vanke 'H'* 2202 HK 26.75 46.7 32.6 BUY 45.56 10 12 5.5 4.9 5.4 6.1 19.4 19.0 18.1 1.0 41.1 34.9 Country Garden* 2007 HK 9.90 28.1 31.6 BUY 12.45 7 12 5.1 4.6 5.6 6.3 18.8 18.5 55.6 0.9 18.2 45.7 Evergrande* 3333 HK 11.86 20.2 21.6 BUY 22.94 25 2 4.4 4.3 11.3 11.6 17.8 16.7 152.9 0.8 33.9 65.0 Longfor* 960 HK 45.55 35.6 45.1 BUY 57.65 16 13 10.1 9.0 4.5 5.0 19.7 19.9 46.5 1.9 75.1 39.3 Shimao Group* 813 HK 22.30 10.2 17.5 BUY 36.07 16 10 4.5 4.1 9.4 10.3 15.5 15.6 55.5 0.6 27.7 19.6 Sunac China* 1918 HK 29.10 17.5 62.1 BUY 46.50 5 10 3.5 3.2 6.3 7.0 23.0 21.3 96.0 0.7 52.9 45.0 Average 13 10 5.6 5.1 6.8 7.4 17.3 17.0 60.7 0.9 42.9 Mid cap Agile Property* 3383 HK 10.76 5.4 6.2 BUY 18.14 19 8 3.5 3.2 11.4 12.4 14.7 14.6 95.7 0.5 13.3 18.9 China Aoyuan* 3883 HK 9.17 3.2 8.6 BUY 11.27 21 21 3.5 2.9 10.1 12.2 28.7 28.7 82.7 0.9 n.a. n.a. China Jinmao Hldgs* 817 HK 2.96 4.8 9.8 HOLD 3.00 62 29 4.7 3.7 9.6 11.1 13.8 14.1 44.7 0.5 9.0 67.1 CIFI Holdings 884 HK 6.81 7.2 10.5 NR n.a. 14 17 4.9 4.2 7.1 8.3 21.5 20.8 71.3 0.9 n.a. n.a. Seazen 1030 HK 9.11 7.3 11.3 NR n.a. (3) 12 4.7 4.2 6.3 7.1 24.4 22.8 50.7 1.1 n.a. n.a. Guangzhou R&F 2777 HK 9.83 4.7 6.2 NR n.a. (8) 18 3.5 2.9 13.0 14.0 10.9 10.0 130.2 0.3 n.a. n.a. KWG Property 1813 HK 12.10 5.0 7.9 NR n.a. 15 19 4.1 3.5 10.9 12.9 18.1 19.3 61.7 0.7 n.a. n.a. Logan Property* 3380 HK 12.52 8.9 6.6 BUY 16.44 21 15 3.9 3.4 10.2 11.7 32.9 31.1 68.0 1.2 33.7 62.8 Shenzhen Inv 604 HK 2.75 3.2 2.2 NR n.a. 22 9 5.4 4.9 7.5 7.9 8.5 8.6 21.9 0.4 n.a. n.a. Sino-Ocean Land 3377 HK 1.63 1.6 2.1 NR n.a. (7) 9 3.9 3.6 11.0 12.1 5.5 5.4 54.8 0.2 n.a. n.a. Average 14 16 4.2 3.7 9.5 10.8 17.8 17.5 66.2 0.7 49.5 ^ Denominated in SGD for price; ~ Simple average discount to NAV; Market cap weighted average NAV = 45%; # Exclude outliners ~~Gross Gearing; ^^ FY21: FY22; FY22: FY23 Source: Thomson Reuters, *DBS HK Page 3 Industry Focus China Property Weekly Digest Valuation comparison 3- mth daily Net Disc/ 1- Jun Mkt trading 12- m EPS gth PE PE Yield Yield R OE R OE Gearing P/Bk NAV (Prem) Price Cap value R ecom target 21F 22F 21F 22F 21F 22F 21F 22F 2020A 21F to NAV Company Name Code HK$ US$bn US$m HK$ % % x x % % % % % x HK$ % Small cap BJ Cap Land 'H' 2868 HK 1.05 0.1 0.6 NR n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. 203.2 n.a. n.a. n.a. Central China* 832 HK 2.08 0.8 3.6 BUY 2.91 (10) 4 3.1 2.9 11.4 11.9 13.5 12.5 13.6 0.4 7.9 73.7 China Merchants Land 978 HK 1.11 0.7 0.2 NR n.a.