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报告摘要

Sino-Ocean Land (3377 HK) Report Summary

Core Content

This report provides an analysis of Sino-Ocean Land (3377 HK), a real estate holding and development company primarily focused on China property development. The report outlines the company's current performance, future outlook, and valuation metrics, while also comparing it with other players in the industry.

Main Points

Company Overview

Industry: Financials
Sector: Real Estate Holding & Development
Principal Business: China property development
Market Cap (HK$): 29,834 million
Price Target: HK$4.50 (12-month)
Recommendation: HOLD

Financial Highlights

FY14F EPS (HK$): 0.57
EPS Growth (2013-2014): 18.7%
Pre-tax Profit (2013F): 5,740 million RMB
Net Profit (2013F): 2,311 million RMB
Core Net Profit (2013F): 2,311 million RMB
Net Dividend Yield (2013F): 4.8%
P/Book Value (2013F): 0.8x
Net Debt/Equity (2013F): 0.4x
ROAE (2013F): 10.3%

Commercial Property Development

Rental Income Acceleration: Rental income is expected to become a mid-term growth driver.
Self-Branded Mall: "We-Life Plaza" in Beijing opened in 1Q13, with an occupancy rate of 99% and a blended rental rate of Rmb10/day/sm.
Future Plans: Management aims to complete 200k-300k sm GFA of commercial properties over the next five years, targeting Rmb2bn annual rental income in 2016.
Residential Sales: Achieved 80% of 2013 sales target in 9M13, with full-year sales expected to reach Rmb36-37bn.
2014 Sales Target: Expected to exceed Rmb40bn, up >14% from 2013 target of Rmb35bn.

Landbanking Strategy

Resumes Landbanking: Focus on top-tier cities such as Beijing and Shenzhen.
Land Acquisition: Acquired a premium land site in Beijing Laiguangying with a land cost of Rmb13k/sm, significantly lower than nearby projects.
Future Acquisitions: Another land acquisition in Beijing is expected by end-2013.
Acquisition Strategy: Will seek M&A or primary land development opportunities to acquire premium land at reasonable prices.

Government Policy Outlook

No Further Stricter Measures: The central government is unlikely to announce stricter property market measures.
Long-Term Mechanism: Policies may focus on long-term mechanisms rather than immediate restrictions.
Support for Different Market Segments: Support for low-end and medium-end housing, while relaxing controls on the high-end market.

Strategic Collaborations

Cooperation with China Life: Explores opportunities for senior citizen housing and JV property fund.
Alliance with Swire: Developed the Taikoo Li project, which is expected to reach Rmb1bn p.a. in rental income by 2016.

Key Information

Valuation Metrics

Current Price (HK$): 5.01
PE (2014F): 8.8x
EV/EBITDA (2014F): 7.3x
Discount to NAV: 44%
NAV Accretive Acquisitions: Expected to drive value.

Comparison with Industry Players

Company Name	Code	12-Month Price Target (HK$)	EPS Growth (%)	PE (2014F)	Net Div Yield (%)	P/Bk (2014F)	Discount to NAV (%)	Recommendation
China Overseas	688 HK	26.12	4	8.6	9.7	11.7	13.0	Buy
Country Garden	2007 HK	5.94	12	7.5	30	19.2	21.8	Buy
CR Land	1109 HK	24.49	(20)	12.2	2.0	11.7	13.0	Buy
Evergrande	3333 HK	4.66	(1)	4.6	5.8	18.2	16.8	Buy
Longfor	960 HK	n.a.	(4)	15	8.6	18.6	18.3	NR
Shimao Property	813 HK	20.12	(5)	7.3	3.8	19.0	16.8	Buy
China Vanke 'B'	200002 CH	n.a.	24	22	3.4	21.1	18.2	NR
Average (Tier 1)	-	-	2	18	2.9	13.3	13.6	-
Agile Property	3383 HK	11.37	(19)	5.5	3.6	13.8	13.0	Buy
COGO	81 HK	12.00	14	5.5	1.4	29.6	30.3	Buy
Franshion	817 HK	3.74	(9)	6.7	5.5	10.4	12.3	Buy
Greentown	3900 HK	11.37	(1)	5.5	3.0	14.4	16.8	NR
Guangzhou R&F	2777 HK	n.a.	(0)	5.2	4.9	19.2	19.5	NR
Hopson Dev	754 HK	n.a.	(31)	5.2	0.1	5.0	6.5	NR
KWG Property	1813 HK	n.a.	(1)	4.0	2.8	14.6	15.2	NR
Poly (Hong Kong)	119 HK	n.a.	5	5.2	3.4	9.9	10.6	NR
Shui On Land	272 HK	n.a.	(80)	1.7	2.3	11.7	13.0	Hold
Sino-Ocean Land	3377 HK	4.50	(30)	11.3	3.4	7.2	8.7	Hold
Soho China	410 HK	n.a.	(67)	5.8	5.5	11.2	7.3	Hold
Sunac China	1918 HK	n.a.	(1)	3.0	2.6	27.3	26.4	NR
Yanlord Land	YLLG SP	n.a.	(33)	1.0	3.0	14.6	15.2	Hold
Yuexiu Property	123 HK	n.a.	(1)	4.0	3.4	12.9	13.6	Buy
Average (Tier 2)	-	-	(19)	24	3.1	13.3	13.7	-
BJ Cap Land 'H'	2868 HK	n.a.	(1)	3.9	3.4	12.7	15.7	NR
BJ North Star 'H'	588 HK	n.a.	(3)	3.1	0.0	6.1	6.6	NR
C C Land	1224 HK	n.a.	(1)	10.1	2.0	3.9	5.1	Hold
Central China	832 HK	n.a.	(1)	5.3	4.3	17.2	18.2	Buy
China SCE	1966 HK	n.a.	(1)	6.0	4.9	9.0	10.4	NR
Greenland	337 HK	n.a.	(1)	1.8	0.0	7.3	2.6	Hold
Guangzhou R&F	2777 HK	n.a.	(0)	6.0	5.5	19.2	19.5	NR
Hopson Dev	754 HK	n.a.	(0)	5.2	0.0	5.0	6.5	NR
KWG Property	1813 HK	n.a.	(0)	4.6	2.1	14.6	15.2	NR
Poly (Hong Kong)	119 HK	n.a.	(0)	5.2	3.0	9.9	10.6	NR
Shui On Land	272 HK	n.a.	(0)	14.8	1.2	13.8	13.0	Hold
Sino-Ocean Land	3377 HK	n.a.	(0)	10.4	3.4	7.2	8.7	Hold
Soho China	410 HK	n.a.	(0)	7.8	5.5	11.2	7.3	Hold
Sunac China	1918 HK	n.a.	(0)	3.9	5.2	27.3	26.4	NR
Yanlord Land	T:Z25	n.a.	(0)	9.6	1.0	14.6	15.2	Hold
Yuexiu Property	123 HK	n.a.	(0)	9.4	5.2	12.9	13.6	Buy
Average (Tier 3)	-	-	(1)	3.8	3.1	12.9	13.6	-

Conclusion

Sino-Ocean Land is maintaining a HOLD recommendation with a price target of HK$4.50. The company is focusing on sustainable growth, diversifying its asset classes, and expanding its commercial property portfolio. It is also actively pursuing strategic partnerships, particularly with China Life, and has made progress in its landbanking strategy in key cities like Beijing. Despite current valuations being at a 44% discount to NAV, the company is well-positioned for long-term value creation.

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