20180803-兴业金融证券-1H18_Preview_–_Earnings_Set_To_Beat_9页_482kb

报告摘要

Real Estate Sector Summary – 1H18 Preview

Core Content

This report provides an analysis of the real estate sector in Hong Kong, focusing on earnings expectations, contracted sales growth, and investment ratings for key developers. It outlines the overall market outlook, identifies top picks, and discusses valuation trends.

Main Points

Sector Outlook: The real estate sector is rated Overweight due to strong earnings growth and undemanding valuations. The sector is currently trading at a 50% discount to NAV and has retreated to -0.5 SD from the 10-year historical mean level.
Earnings Growth: Developers are expected to report a 35-40% YoY increase in core earnings for 1H18. Most developers, except for Greentown China Holdings, are on track for solid earnings growth. The report also highlights that Country Garden, CR Land, and Agile Property may post >50% YoY growth in earnings.
Contracted Sales: Contracted sales revenue for 1H18 is expected to grow by 37% YoY, outperforming the sector average of 25-30% YoY. The report forecasts that developers will likely beat their contracted sales targets by 10-15% on average.
Policy Risk: Despite ongoing city-specific austerity measures, the report notes a loosening trend on the supply side, which aims to increase land supply and relieve high land prices.
Investment Ratings: The report recommends Buy for Shimao Property, Country Garden, and CIFI Holdings, with Neutral for Sunac and Sell for COGO. It also highlights potential earnings surprises for CR Land and Agile.

Key Developers and Their Performance

Developer	Stock Code	Core Earnings (1H18F)	YoY Growth	1H as % of FY18F	Target Price (HKD)	Current Price (HKD)	ENAV Discount (%)
Shimao Property	813 HK	5.3	43.5%	50.7%	30.00	20.90	47.8%
Country Garden	2007 HK	12.1	60.8%	35.9%	22.00	11.02	57.3%
CIFI Holdings	884 HK	2.3	47.2%	37.3%	7.80	4.44	57.3%
CR Land	1109 HK	6.7	106.9%	27.5%	31.50	27.05	35.6%
Agile Property	3383 HK	3.0	63.1%	35.8%	20.00	11.36	66.6%
KWG Property	1813 HK	2.0	40.4%	49.8%	10.00	8.21	63.2%
Longfor	960 HK	3.8	32.0%	29.7%	26.30	21.50	38.7%
COGO	81 HK	0.9	24.3%	52.4%	2.30	2.58	60.9%
Sunac	1918 HK	4.1	200.7%	32.0%	31.00	22.55	45.4%

Investment Recommendations

Top Picks: Shimao Property, Country Garden, and CIFI Holdings are highlighted as top picks with a Buy rating.
Potential Earnings Surprises: Country Garden, CR Land, and Agile Property are expected to report significant earnings growth.
Ratings Summary:
- Buy: Shimao Property, Country Garden, CIFI Holdings, CR Land, Sunac, Longfor, China South City
- Neutral: Sunac, KWG Property
- Sell: COGO, Greentown China

Sector Valuation

The sector is currently trading at a 50% discount to NAV.
The ENAV discount is around 67% for Agile Property and 60.9% for COGO.
The large peer average has an ENAV discount of 63.2%.
The sector average has an ENAV discount of 68%.

Analysts

Toni Ho CFA: +852 2103 5888, totoni.ho@rhbgroup.com
Angelo Wong: +852 2103 9218, angelo.wong@rhbgroup.com

Investment Ratings Guide

Buy: Share price may exceed 10% over the next 12 months.
Trading Buy: Share price may exceed 15% over the next 3 months, but long-term outlook is uncertain.
Neutral: Share price may fall within ±10% over the next 12 months.
Take Profit: Target price has been attained; look to accumulate at lower levels.
Sell: Share price may fall by more than 10% over the next 12 months.
Not Rated: Stock is not within regular research coverage.

Disclaimers

The report is for information purposes only and not intended as an offer or solicitation to buy or sell securities.
Information is based on publicly available data and may not be independently verified.
The report is not directed to, or intended for distribution to, any person or entity in jurisdictions where it would be illegal.
Recipients must ensure they are lawfully able to receive the report and acknowledge the limitations.

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