GC: China Property: Weekly: Property GFA New Starts Reported the First Single-Month Decline in 2017(added peer comparison table)
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日期: 2017年8月14日 SGT 下午10:07:52
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主题: 转发：GC: China Property: Weekly: Property GFA New Starts Reported the First Single-Month Decline in 2017(added peer comparison table)
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在 2017年8月14日，下午8:19:43，wend...@uobkayhian.com 写道：
Date: 2017年8月14日, 下午8:19:43
Subject: GC: China Property: Weekly: Property GFA New Starts Reported the First Single-Month Decline in 2017(added peer comparison table)China Property UNDERWEIGHTWeekly: Property GFA New Starts Reported the First Single-Month Decline in 2017
Home sales GFA in the sample cities up by 3.8% wow last week (tier-1,-2,-3,-4:+2.7%, +3.8%, +1.8% and +17.2% wow), reversing from 5.9% wow decline in the week of July 30th to Aug 5th. On yoy basis, the transaction volume down by 30% yoy with tier-4 cities still outperformed.
Home Sales in Sample Cities WoW Change
Source: WIND, UOB Kay Hian
Land cost boomed wow in all tiers of cities. Last week, we saw a significant increase in the land cost of all tiers of cities: tier-1, 2 and 3 up by 76% wow, 48% wow and 53% wow respectively. However, the land premium over bid rates remain acceptable at 19.9%, 6.4% and 33.9% respectively. We think the land cost surge was mainly due to the supply shortage, which down by 32.2% wow, 46.7% wow and 78.6% wow.
Average first home mortgage rate kept climbing. In July-17, the average first home mortgage rate further increased from 4.89% in June to 4.99%, which was 1.02x benchmark rate and recorded the highest level since Aug-15.
Average First Home Mortgage Rate
Source:Rong360, UOB Kay Hian
Property GFA new starts reported the first single-month decline in 2017. NBS released the July-17 property data. The growth momentum in property sales value slowed down to 18.9% yoy in 7M17, which is in line with our expectation as both developers’ contracted sales and tier-3/4 sales reported a slowdown in July. Total REI recorded a single-month growth at 4.8% yoy in July-17, which was the lowest level in 2017. Moreover, July GFA new starts recorded the first single-month decline at 4.9% yoy, which we believe implies developers’ concern on the property market in 2H17, as the tightening headwinds continue, the average mortgage rate up and the financing channel sustain tight.
Corporate event: Last week, we released two reports on the interim results of CIFI (884 HK/Buy/TP HK$4.91) and Logan (3383 HK/Not Rated). Summary are as follow.
a) CIFI (884 HK/Buy/TP HK$4.91): CIFI reported solid 1H17 results with core net profit up 62% yoy and higher than our expectation. Gross and core net profit margins saw an improvement, thanks to projects with better profitability. The company declared an interim dividend of 5 HK cents, in line with our expectation. Net gearing ratio was up at 84% and is likely to remain at this level for the rest of the year. We think this is an acceptable level, given CIFI’s proactive land acquisitions.
Report link: https://research.uobkayhian.com/content_view.jsp?id=41098&back=%2FqSearch_result.jsp%3F&h=160134f4214329e47c0dadcb73f646f
b) Logan (3380 HK/Not Rated): Logan reported a substantial increase in both revenue and core earnings, which grew by 94.6% yoy and 63% yoy respectively. The company declared a total dividend of 22 HK cents, implying a 40% dividend payout ratio. Backed by Rmb73b of saleable resources, the company has revised up its contracted sales target to Rmb37b, implying a required sell-through rate at 51%. Moreover, Logan has large land reserve in the Guangdong-Hong Kong-Macau Greater Bay Area (GHM). As of end-1H17, Logan had total landbank of 14.8m sqm in terms of GFA or Rmb184b in terms of value (excluded redevelopment &acquisition). Of this total landbank, 72% are located in the GHM area based on land value. On the other hand, the accumulated land cost was only Rmb4,680/sqm. In addition, the company has a huge redevelopment acquisition land reserve of Rmb204b, of which 89% is located in GHM.
Report link:https://research.uobkayhian.com/content_view.jsp?id=41135&back=%2FqSearch_result.jsp%3F&h=2c9f13441c3f36d9422d5de661e57742
We are stepping into 1H17 result season. Below summarized the result date and the briefing details for your reference.
Source:Company data, UOB Kay Hian
China’s developers index down 0.2% vs. the HSCEI’s 3.1% loss. We maintain UNDERWEIGHT considering the tightening headwinds and the higher mortgage rate. Top pick remains as CRL (1109 HK) and Longfor (960 HK).
Peer Comparison Table for Major Developers ( based on Bloomberg consensus estimate )
Source:Bloomberg, UOB Kay Hian
Regards,
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