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【推荐】ChinaPropertySnapshotofAugphysicalmarket金英证券公司
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类别：行业研究 机构：金英证券(香港)有限公司研究员：Karen Kwan日期：2014-09-15
Aug data by CREIS showed 42 cities surveyed in China saw a 1.5% MoM rise in GFA transacted to 20.15m sq m, while down 13.3% YoY. Volume sold was stable across Tier 2 and 3 cities MoM. The 4 Tier 1 cities fared well, with an average 11% MoM rise in GFA sold. Inventory stayed at a high level, posting a 1.5% MoM rise for the surveyed cities, but Hangzhou, Ningbo and Hefei saw a drop of over 4%, an encouraging sign.
The land sales market continued to be weak, with 73m sq m of GFA sold in Aug across 300 cities in China, down 15% MoM and down 37% YoY. Land costs in Tier 2 and 3 cities showed some weakness (down 4% and down 8% MoM) but Tier 1 cities stayed high and rose considerably MoM, partly due to highquality land parcels put up for sale in Beijing.
Sector trading at 51% discount to NAV, and 5.5x PER and 0.6x P/BV for FY15F. We prefer COLI (688 HK, BUY, TP HKD25.60) and Sunac (1918 HK, BUY, TP HKD7.30) at this juncture.Agile’s valuations look too distressed to us despite restructuring effects will take time.
What’s New
CREIS released Aug data on China property sales and land market transactions. GFA sold in Aug was flattish vs Jul for the 42 cities surveyed. We expect Sept sales to pick up vs Aug as we enter into a high season with more launches. Between 2010 and 2013, for overall China, Sept property volume sold rose 25-53% MoM. We expect good property sales this Sep with more launches coming to the market and most developers willing to adopt a flexible pricing strategy.
Sept sales to pick up for most developers
Furthermore, recently, a small number of cities (including Hangzhou and some in Jiangxi Province) had requested their local PBoC branches to allow the lowering of second home mortgage downpayments, according to the Chinese media. If permitted, this could help boost some upgrader demand, in our view. Sunac, Shimao, R&F, Franshion and Agile’s Sept contract sales should show a good pick-up vs Aug, in our view.