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China Property Weekly Digest Summary (Issue No. 137)

Core Content Overview

This report provides a detailed analysis of the real estate market performance in China, focusing on sales trends, inventory levels, and valuation comparisons across different cities and companies. The data covers the period from August 3 to August 9, 2015, and compares it with previous weeks and years.

Key Market Trends

Weekly Sales Performance

• Overall Sales:

  • GFA sold decreased by -1.7% w-o-w and +8.3% YTD compared to 2014, but -5.2% YTD compared to 2013.
  • ASP decreased by -1.5% w-o-w and -7.8% YTD compared to 2014, but -6.7% YTD compared to 2013.
  • Inventory level remained stable at 68 weeks, lower than 2014's average of 77 weeks.

• Tier I Cities:

  • GFA sold decreased by -16% w-o-w and +75% YTD compared to 2014, but -17% YTD compared to 2013.
  • ASP decreased by -6% w-o-w and +27% YTD compared to 2014, but -3% YTD compared to 2013.

• Tier II Cities:

  • GFA sold decreased by -22% w-o-w and +31% YTD compared to 2014, but -8% YTD compared to 2013.
  • ASP increased by +4% w-o-w and -4% YTD compared to 2014, but -2% YTD compared to 2013.

• Tier III Cities:

  • GFA sold decreased by -14% w-o-w and +48% YTD compared to 2014, but -8% YTD compared to 2013.
  • ASP decreased by -2% w-o-w and -14% YTD compared to 2014, but -2% YTD compared to 2013.

New Projects Launched

• A total of 9,000 units were launched in Tier I and II cities.
• The average sell-through rate for new launches dropped to 66% from 69% in the previous week.
• Nanjing launched the most new projects with 10.

Inventory Level

• The number of weeks to digest inventory was 68 weeks, indicating a stable inventory level.
• This is lower than the 77 weeks average in 2014.
• Inventory trends are shown in a rolling 26 weeks chart, highlighting the stability in inventory levels.

Share Price Performance and Peer Valuations

• The report includes a table comparing the share price performance, market capitalization, earnings growth, and other financial metrics of various real estate companies.
• Companies like China Overseas, Country Garden, and CR Land are recommended as Buy, while Evergrande and Longfor are recommended as Hold or NR (No Recommendation).
• The average financial metrics across different company sizes are summarized, showing variations in earnings growth, price-to-earnings ratios, and return on equity.

Key Insights

• Sales Decline: Sales in Tier I, II, and III cities showed a decline in the first two weeks of August compared to July, but remained higher year-on-year.
• Inventory Management: Inventory levels were stable, suggesting a balanced market, though lower than the previous year.
• Valuation Trends: There are notable differences in valuation metrics among large, mid, and small cap companies, with some showing strong growth potential and others being held or not recommended.

Conclusion

The report highlights a generally slower sales environment during the traditionally tepid month of August, with a notable increase in the number of new units launched but a lower sell-through rate. Inventory levels remained stable, and the market showed mixed performance across different city tiers. Valuation comparisons reveal a range of investment opportunities and risks, with several companies recommended for purchase and others held or not recommended.