20160222-招商证券_香港_-世茂房地产-00813.HK-Outlook_positive_on_rental_and_profit_growth_12页_2mb_2mb

报告摘要

KWG Property (1813 HK) Summary

Core Content

KWG Property (1813 HK) is a property company with a positive outlook on its rental and profit growth. Despite missing its earnings and dividend targets in FY15, the company is expected to see profit growth in FY16 and FY17, as well as an expansion in rental properties, leading to more stable income.

Key Points

FY15 Performance:
- Core net profit was RMB2.6bn, 8% below the estimate of RMB2.8bn due to higher costs and fewer projects booked.
- Revenue reached RMB16.5bn, an 11% increase YoY.
- GPM stood at 36%, higher than peers' 27%.
- Net gearing was 69%, slightly higher than the estimated 63%.
- Funding cost improved to 8.5% (FY14: 10.1%).
- Proposed a final dividend of RMB0.29/share, yielding 6.6%, lower than the estimated RMB0.36/share.
FY16 Outlook:
- Contracted sales are expected to reach RMB21.9bn, a 9% increase YoY.
- Profit is forecasted to grow by 10%.
- Due to revised estimates, core earnings are expected to grow by 11% in FY16 and 17% in FY17.
- The estimates are 16% and 15% lower than the Bloomberg consensus.
- A 10% RMB depreciation against HK$ could reduce FY16E earnings by 12.3% in HK$ terms.
Rental Properties Expansion:
- The company launched 8 rental properties in 2016-17E.
- Rental revenue (excluding hotels) is expected to grow 2.7x to RMB577mn by FY17E.
- Favorable REITs policy changes in the A-share market could lead to a stock re-rating.
- The current NAV discount of 66% is considered attractive compared to peers' 55%.
Target Price and Recommendation:
- Maintain BUY with a target price of HK$5.7, a potential upside of 9% from the previous price of HK$5.24.
- The target price is based on a 63% discount to the lowered NAV of HK$15.4, equivalent to 1SD below the 7-year mean.

Financial Highlights

Metric	FY13	FY14	FY15	FY16E	FY17E
Revenue (RMB mn)	9,468	10,466	8,340	13,629	15,256
Revenue Growth (%)	-2%	11%	-20%	63%	12%
Core Net Profit (RMB mn)	2,344	2,577	2,596	2,864	3,339
Core Profit Growth (%)	22%	10%	1%	10%	17%
Core EPS (HK$)	0.99	1.10	1.05	1.14	1.33
Net Gearing (%)	56%	67%	69%	63%	56%
P/E (core EPS)	5.3x	4.7x	5.0x	4.6x	3.9x
P/B	0.7x	0.6x	0.6x	0.5x	0.5x
Dividend Yield (%)	7.0%	7.9%	6.6%	6.5%	7.6%

Key Financials and Trends

Revenue Growth: Significant increase in FY16E with a 63% growth, followed by 12% in FY17E.
Core Net Profit: Expected to grow by 10% in FY16E and 17% in FY17E.
Net Gearing: Improved from 69% in FY15 to 63% in FY16E and 56% in FY17E.
P/E Ratio: Declined from 5.3x in FY13 to 3.9x in FY17E.
P/B Ratio: Reduced from 0.7x in FY13 to 0.5x in FY17E.
Dividend Yield: Increased from 7.0% in FY13 to 7.6% in FY17E.

New Projects and Revenue Sources

2016-2017E Projects:
- Shanghai Vision of the World: 100% stake, 54,000 RMB psm, 1,244 RMB mn revenue.
- Guangzhou Top of World: 100% stake, 7,750 RMB psm, 1,240 RMB mn revenue.
- Shanghai Amazing Bay: 100% stake, 17,777 RMB psm, 1,350 RMB mn revenue.
- Guangzhou Finance City: 100% stake, 40,000 RMB psm, 924 RMB mn revenue.
- Beijing Tongzhou Project I: 100% stake, 35,000 RMB psm, 2,818 RMB mn revenue.
- Guangzhou Global Metropolitan Plaza: 100% stake, 8,600 RMB psm, 1,240 RMB mn revenue.
- Shanghai U Fun: 100% stake, 107k sqm, expected to be 80-90% pre-leased with about 6% initial yield.
- Guangzhou Tianhui Plaza: 115k sqm, expected to launch in 2H2016.
- Shanghai U Fun: Expected to launch in 1H2016.

Sector Valuation Comparison

Company	Ticker	Price (HK$)	Mkt Cap (US$ mn)	NAV (HK$)	Discount to NAV (%)	FY15E P/E	FY16E P/E	FY15E Yield (%)	FY16E Yield (%)	FY15E P/B	FY16E P/B	Net Gearing FY14 (%)	Net Gearing FY15E (%)	Net Gearing FY16E (%)
KWG Property	1813 HK	5.24	2,020	15.4	66.0	5.0	4.6	6.6	6.5	0.6	0.5	66.8	69.0	63.2
China Overseas	688 HK	23.55	29,877	30.4	22.5	7.4	7.2	2.7	2.8	1.2	1.0	27.1	26.2	24.2
CR Land	1109 HK	19.22	17,139	30.6	37.2	9.3	8.1	2.4	2.5	1.1	1.0	40.5	39.2	36.7
Country Garden	2007 HK	2.98	8,602	5.1	41.6	5.8	5.5	5.2	5.5	0.8	0.8	62.2	79.9	105.7
Evergrande	3333 HK	5.24	9,219	5.3	1.1	9.7	9.7	2.6	2.6	1.2	1.1	251.0	288.2	297.8
Longfor	960 HK	9.60	7,206	14.6	34.2	6.4	5.7	3.6	4.1	0.9	0.8	61.4	49.3	48.6
Shimao Property	813 HK	10.42	4,655	32.9	68.3	3.9	3.8	8.6	8.6	0.6	0.5	58.6	64.4	67.4
Wanda	3699 HK	33.90	19,746	70.0	51.6	7.2	6.0	4.0	4.7	0.8	0.7	56.7	33.3	54.8
China Vanke	2202 HK	17.18	24,400	22.0	21.9	8.9	7.5	4.0	4.7	1.6	1.4	6.3	7.4	10.8
Agile Property	3383 HK	3.84	1,935	12.4	69.0	4.3	3.8	4.8	5.6	0.4	0.3	96.6	82.2	81.3
Yuexiu Property	123 HK	1.13	1,803	3.5	67.7	6.5	5.8	5.8	7.3	0.4	0.4	79.9	71.8	62.6
Greentown China	3900 HK	6.62	1,842	14.6	54.7	5.1	4.7	3.9	4.3	0.5	0.4	93.4	73.5	67.4
CIFI Holdings	884 HK	1.57	1,349	4.1	61.7	4.4	3.7	5.6	6.8	0.7	0.6	66.6	71.9	70.8
Poly Property	119 HK	2.18	1,027	8.1	73.1	30.3	19.1	1.1	1.7	0.3	0.3	97.0	131.4	96.6
Yuzhou Properties	1628 HK	1.74	854	5.9	70.5	5.8	4.3	9.8	9.9	0.6	0.5	59.8	66.9	66.0
Gemdale	535 HK	0.40	813	n.a.	n.a.	5.8	N/A	N/A	N/A	N/A	N/A	10.4	N/A	N/A
COGO	81 HK	2.70	793	7.6	64.5	5.8	4.3	9.8	9.9	0.6	0.5	59.8	66.9	66.0

Summary

KWG Property (1813 HK) is expected to see positive growth in rental and profit despite missing its FY15 targets. The company has a significant NAV discount and is poised for potential re-rating due to favorable REITs policies. Its strategic shift to hold and rent prime properties is expected to increase stable income. The company has a diverse portfolio of new projects and is forecasted to achieve growth in both revenue and profit in the coming years. The target price of HK$5.7 reflects a 63% discount to the estimated NAV of HK$15.4, indicating a potential upside for investors.

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