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2015 年 10 月 5 日

中国：开发商证券研究报告

乐观的理由：供需改善但估值更低（摘要）

创纪录的供应收缩，需求走强：库存随之降低近期 A 股市场震荡、人民币突然贬值以及经济走势疲弱再度导致房地产股遭到抛

售，推动我们研究范围内海外上市股票估值降至周期低点。但是，中国房地产市

场目前的供应面收缩已达到创纪录的水平：住宅土地出让继 2014 年同比下滑

34%之后，今年前 8 个月同比收缩了 41%，大约相当于过去五年均值的一半；同

样地，新开工面积继 2014 年同比下滑 11%之后，今年前 8 个月收缩了 17%。而

另一方面，由于降息和政府放松了住房抵押贷款限制，今年前 8 个月交易量同比

上升了 7%。因此，各线城市的房地产库存均呈下降走势。

财务状况好转，但估值计入了零增长我们认为我们研究范围内的海外上市开发商估值已经计入了零增长（0.8 倍的

2015-17 预期市净率均值 vs 13%的净资产回报率，截至 2015 年上半年末，平均

资本化率从 23%升至 25%）以及地价骤降（甚至低于部分开发商的土地购置成

本）。我们预计持续的政策放松将改善住房承受比并释放积压需求，这应该会支

持房价持续复苏，并提振市场对于再投资和增长前景的信心。

较好的净资产回报率，将世茂房地产、中国海外和融创中国的评级上调至买入为了将我们研究范围内个股 12 个月目标价格的隐含市净率保持在与国内/海外上

市开发商在上次行业复苏至扩张早期阶段（2012 年至 2013 年上半年）的市净率-净资产回报率趋势线相一致的水平，我们将通过 2015-17 年预期市净率-净资产回

报率而假设的净资产价值溢价/折让幅度调整了-40 个百分点至+10 个百分点，平

均调整幅度为-10 个百分点。我们还修正了部分项目的均价，并调整了部分开发商

的核心利润预测（将 2015-2017 年核心利润预测调整了-5%至+19%，将 2015 年

年底净资产价值调整了-6%至+6%）。由于做出了如上调整，我们将我们的目标

价格调整了的-57%至+15%。

有鉴于此，我们将世茂房地产、中国海外和融创中国的评级从中性上调至买入，

并将世茂房地产加入强力买入名单。尽管这些公司在增长前景改善和利润率企稳

的的驱动下净资产回报率四分位情况改善或企稳，但其股票与行业市净率-净资产

回报率趋势线之间的溢价收窄/折让加大。我们维持对于瑞安房地产的买入评级但

将其移出强力买入名单。我们将仁恒置地和保利置业的评级从买入下调至中性，

对于前者的评级调整主要出于估值考虑，而下调后者评级是因其基本面复苏弱于

预期。

*全文翻译随后提供

评级为买入或卖出的股票估值概要

* 表明该股位于我们的地区强力买入名单。 B=买入, S=卖出。股

价截至 2015 年 9 月 25 日收盘。

资料来源： Datastream、高华证券研究

相关研究

房价开始复苏，或将很快全面企稳，2015 年 06 月 01 日

海外地产股估值框架向 A 股靠近；估值变动推动目标价上调，2015 年 05 月 10 日

优化供应有助于加速供需平衡，2015 年 03 月 27 日

截至目前业绩期综述：降库存为 2015 年关注重点，2015 年 03月 21 日

2015 年展望：房价触底；买入海外上市落后股和内地龙头企业，2015 年 01 月 19 日

王逸, CFA (Analyst) 执业证书编号: S1420510120004 +86(21)2401-8930 [email protected] 北京高华证券有限责任公司

北京高华证券有限责任公司及其关联机构与其研究报告所分析的企业存在业务关系，并且继续寻求发展这些关系。因此，投资者应当考虑到本公司可能存在可能影响本报告客观性的利益冲突，不应视本报告为作出投资决策的唯一因素。有关分析师的申明和其他重要信息，见信息披露附录，或请与您的投资代表联系。

李薇 (Analyst) 执业证书编号: S1420510120012 +86(21)2401-8926 [email protected] 北京高华证券有限责任公司管婕 (Research Assistant) +86(21)2401-8921 [email protected] 北京高华证券有限责任公司

北京高华证券有限责任公司投资研究

Rating LCYLatest

share price

End-15E

NAV

12-m

TP

Potential

upside/

downside

Offshore listed

Agile Buy* HK$ 3.91 13.65 8.20 110%

Shimao Buy* HK$ 11.48 29.66 23.70 106%

Sunac Buy HK$ 4.18 11.25 7.90 89%

Shui On Land Buy HK$ 1.75 5.28 3.20 83%

Country Garden Buy HK$ 2.70 6.88 4.80 78%

KWG Buy HK$ 5.03 12.38 8.70 73%

COLI Buy HK$ 23.55 31.35 37.60 60%

Wanda Buy HK$ 44.65 88.73 71.00 59%

Evergrande Sell HK$ 4.46 8.93 4.50 1%

Onshore listed

Poly (A) Buy Rmb 8.02 11.59 12.20 52%

CFLD Buy Rmb 22.82 n.m. 34.70 52%

Vanke (A) Buy* Rmb 12.90 20.66 19.60 52%

OCT Buy Rmb 7.16 16.22 10.50 47%

Gemdale Sell Rmb 12.21 13.34 8.70 -29%

2015 年 10 月 5 日中国：开发商

全球投资研究 2

Table of contents

Summary of changes to our estimates and target prices 3

Tepid property FAI support supply & demand to improve... 4

De-leveraging on track; return recovery needs further price rise 6

Rmb devalue impact: Moderate on book value; more on earnings 9

We expect valuations to align with last cycle recovery phase 10

Valuations pricing in meaningful asset deflation 15

Company snapshots 19

Shimao: Stronger sales to support mean revision; up to Buy (CL) 20

COLI: Defensive quality shines through volatility; up to Buy 22

Sunac: Risk overplayed, strong pipeline for growth; up to Buy 24

SOL: Remove from CL but retain Buy on better asset churn outlook 26

Poly (H): Execution turnaround yet to be seen; down to Neutral 28

Yanlord: Valuation relatively less attractive now, down to Neutral 30

Company appendix 32

Agile (CL-Buy): Improving ROE & B/S justify higher valuation 34

Shimao (CL-Buy): better growth outlook support mean reversion 35

Vanke A (CL-Buy): Top ROE quartile justify higher valuation 36

COLI (Buy): solid fundamental outlook justify a premium valuation 37

Country Garden (Buy): Managing capex the key for re-rating 38

Wanda (Buy): ROE to further improve on light asset model 39

KWG (Buy): Solid fundamentals to drive valuation recovery 40

SOL (Buy): Better asset churn outlook support valuation recovery 41

Sunac (Buy): Fast asset turnover to ensure leading ROE profile 42

Poly A (Buy): Lower ROE on deleveraging 43

OCT (Buy): Valuation recovery of tourism business offers upside 44

Gemdale (Sell): Operation recovery priced in, limited further upside 45

Evergrande (Sell): Weak balance sheet and profitability 46

CRL (Neutral): Slower growth but relatively resilient ROE 47

R&F (Neutral): Continuous deleveraging to support 48

Longfor (Neutral): Solid balance sheet but slower growth 49

Sino Ocean (Neutral): Higher growth from low-base; valuation fair 50

Yanlord (Neutral): recovering asset turn to support mean reversion 51

CML (Neutral): Valuation reflects growth prospect from a low base 52

COGO (Neutral): Unclear positioning caps valuation upside 53

Franshion (Neutral): Big bet on top line may lift its risk profile 54

Greentown (Neutral): Transition on the way but takes time 55

Poly H (Neutral): No re-rating angle until execution turnaround 56

SMC (Neutral): Execution improves, albeit slowly 57

Disclosure Appendix 58

Prices in this report are based on the market close of September 25, 2015 unless stated otherwise.

The authors would like to thank Scofield Chi for his contribution to this report.

2015 年 10 月 5 日中国：开发商


Summary of changes to our estimates and target prices

图表 1. China property coverage – summary of our ratings, TP changes and TP implied upside/downside

Source: Datastream, Company data, Gao Hua Securities Research.

Ticker LCY New Old New OldChg

(ppts)New Old

Chg (%)

Shr price as of

Sep 25

Upside/

downside

Offshore coverageAgile 3383.HK (HK$) Buy* Buy* -40% -30% -10 8.20 9.60 -15 3.91 110%Shimao 0813.HK (HK$) Buy* Neutral -20% -20% 0 23.70 23.60 0 11.48 106%Sunac 1918.HK (HK$) Buy Neutral -30% 0% -30 7.90 11.20 -29 4.18 89%Shui On Land 0272.HK (HK$) Buy Buy* -40% -20% -20 3.20 4.00 -20 1.75 83%Country Garden 2007.HK (HK$) Buy Buy -30% -20% -10 4.80 5.50 -13 2.70 78%KWG 1813.HK (HK$) Buy Buy -30% -20% -10 8.70 9.90 -12 5.03 73%COLI 0688.HK (HK$) Buy Neutral 20% 10% 10 37.60 32.60 15 23.55 60%Wanda 3699.HK (HK$) Buy Buy -20% -10% -10 71.00 79.80 -11 44.65 59%CRL 1109.HK (HK$) Neutral Neutral 0% 0% 0 28.70 27.90 3 18.56 55%COGO 0081.HK (HK$) Neutral Neutral -50% -30% -20 3.60 5.40 -33 2.34 54%R&F 2777.HK (HK$) Neutral Neutral -40% -40% 0 10.80 11.40 -5 7.11 52%Sino Ocean 3377.HK (HK$) Neutral Neutral -40% -40% 0 6.30 6.30 0 4.21 50%Greentown 3900.HK (HK$) Neutral Neutral -40% -20% -20 8.40 11.20 -25 5.67 48%Red Star Macalline 1528.HK (HK$) Neutral Neutral -10% -10% 0 14.20 14.20 0 9.63 47%Franshion 0817.HK (HK$) Neutral Neutral -30% -20% -10 2.80 3.20 -13 1.94 44%Longfor 0960.HK (HK$) Neutral Neutral -40% -30% -10 14.20 16.60 -14 9.84 44%Vanke H 2202.HK (HK$) Neutral Neutral -5% -5% 0 23.90 23.90 0 16.62 44%Yanlord YNLG.SI (S$) Neutral Buy -40% -30% -10 1.50 1.70 -12 1.05 44%SOHO 0410.HK (HK$) Neutral Neutral -50% -30% -20 4.10 5.70 -28 3.04 35%Poly Property (H) 0119.HK (HK$) Neutral Buy -70% -30% -40 2.90 6.70 -57 2.20 32%CML 0978.HK (HK$) Neutral Neutral -20% 0% -20 1.70 2.20 -23 1.35 26%Evergrande 3333.HK (HK$) Sell Sell -50% -50% 0 4.50 4.50 0 4.46 1%Offshore average -10 -13 56%Onshore coveragePoly A 600048.SS (Rmb) Buy Buy 5% 15% -10 12.20 13.30 -8 8.02 52%CFLD 600340.SS (Rmb) Buy Buy n.m. n.m. n.m. 34.70 38.60 -10 22.82 52%Vanke A 000002.SZ (Rmb) Buy* Buy* -5% -5% 0 19.60 19.60 0 12.90 52%OCT 000069.SZ (Rmb) Buy Buy -35% -20% -15 10.50 12.70 -17 7.16 47%SMC 600823.SS (Rmb) Neutral Neutral -20% -10% -10 11.50 13.00 -12 9.82 17%Gemdale 600383.SS (Rmb) Sell Sell -35% -30% -5 8.70 9.30 -6 12.21 -29%Onshore average -8 -9 32%

Potential upside/downside

Rating chg TP NAV discount TP chg

2015 年 10 月 5 日中国：开发商


Tepid property FAI support supply & demand to improve...

The continuous deceleration of property FAI and a yoy decline of land sales and property new starts support our confidence on a stable property price outlook in 2016. As highlighted in Exhibit 2, during the first eight months of 2015 national property sales volume grew 7% yoy and the recovery has taken hold broadly across all the city-tiers. Transaction volumes in “Tier-1” and “Other tier-2 and large tier-3” cities that saw the biggest declines in 2014 have posted the

strongest recoveries year to date.

图表 2. Strong property sales recovery led by tier-1 cities National property sales activities breakdown by city tier

Note: The stack bar on the top left: 1 = Tier-1, 2 =Provincial capitals, 3 = Other tier-2 & large tier-3, 4 = Tier 3/4.

Source: CEIC, NBS.

On the other hand, investment activities remained very weak after the slowdown in 2014, as shown in Exhibit 3. Land sales volume was down by 41% and new starts down another 17% yoy in the first 8 months after a year of decline in 2014. As a result, GFA new starts/GFA sold ratio hit 6-year low in the first 8 months, which we believe should support steady property price recovery in the remainder of 2015 through 2016.

8M15 Breakdown

by city-tier %National Tier 1

Provincial

capitals

Other tier-2 &

large tier-3Tier 3/4

Property sales2010 19% -15% 22% 5% 43%

2011 13% -9% 17% -13% 24%

2012 9% 14% 12% 21% 3%

2013 26% 31% 21% 26% 29%

2014 -6% -13% -4% -8% -6%

8M2015 15% 48% 12% 13% 9%

Average of above 13% 9% 14% 7% 17%

Property GFA sold 2010 10% -29% 5% -11% 22%

2011 5% -11% 6% -21% 9%

2012 1% 15% 5% 16% -2%

2013 17% 15% 14% 20% 19%

2014 -8% -15% -4% -11% -8%

8M2015 7% 22% 6% 15% 6%


Property ASP yoy%2010 8% 20% 16% 18% 18%

2011 7% 2% 11% 10% 13%

2012 8% 0% 7% 5% 6%

2013 8% 14% 6% 5% 8%

2014 1% 2% 0% 3% 3%

8M2015 8% 21% 6% -2% 3%


yoy

yoy

yoy

2

3

4

1

2

3

4

1

2015 年 10 月 5 日中国：开发商


图表 3. Property investment continued weakening; land sales yoy decline hit record low Property investment activities breakdown by city tier

Note: The stack bar on the top left: 1 = Tier-1, 2 =Provincial capitals, 3 = Other tier-2 & large tier-3, 4 = Tier 3/4.

Source: CEIC, NBS.

图表 4. Inventory months has been declining across major cities Major cities’ month inventory

Note: Tier 1 cities include Beijing, Shanghai, Shenzhen and Guangzhou. Selective tier 2 cities include Nanjing, Suzhou, Hangzhou, Xiamen, Qingdao, Chengdu, Changsha and Tianjin. Selective tier 3 cities include Dongguan, Nanchang, Ningbo, Fuzhou and Huizhou. Source: CREIS.

8M15 Breakdown

by city-tier %National Tier 1

Provincial

capitals

Other tier-2 &

large tier-3Tier 3/4

Property FAI2010 33% 25% 32% 33% 37%

2011 28% 12% 26% 35% 32%

2012 16% 8% 20% 20% 15%

2013 20% 15% 18% 15% 24%

2014 10% 12% 11% 10% 10%

8M2015 4% 16% 6% -4% 1%

Average of above 19% 15% 19% 18% 20%

Residential land sold2011 -4% -3% -7% -30% 4%

2012 -19% -30% -1% -19% -27%

2013 31% 44% 24% 21% 37%

2014 -34% -19% -30% -32% -37%

8M2015 -41% -19% -36% -48% -44%

Average of above -13% -5% -10% -21% -13%

Property new start yoy%2010 42% 34% 45% 55% 40%

2011 16% 26% 11% 6% 18%

2012 -7% -21% -5% -8% -6%

2013 13% 16% 14% 11% 13%

2014 -11% -12% -11% -6% -11%

8M2015 -17% -3% -16% -29% -17%


Property new start/GFA sold2010 1.6 1.5 1.6 1.7 1.5

2011 1.7 2.1 1.7 2.3 1.7

2012 1.6 1.5 1.5 1.8 1.6

2013 1.5 1.5 1.6 1.7 1.5

2014 1.5 1.5 1.4 1.8 1.5

8M2015 1.4 1.2 1.3 1.2 1.4

Average of above 1.5 1.6 1.5 1.7 1.5

yoy

yoy

yoy

yoy

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5

Tier-1 Selective Tier-2 Selective Tier-3(Month)

2015 年 10 月 5 日中国：开发商


De-leveraging on track; return recovery needs further price rise

Improving balance sheet; refinancing pressure moderate in 2016E

Similar to the rest of the industry, our coverage universe has also been on a deleveraging trend. As Exhibit 5 shows, land acquisition amount as a percentage of contract sales fell to record low since 2006. Factoring in the rising average land cost year to date, the ratio in volume terms would be even lower. On the back of strong sales and low acquisitions, contract sales growth for our coverage universe was once again higher than the total debt increase in 1H. While we forecast

2015E-2017E ROE to be at five-year lows, this is based on an assumption of no growth of debt. Therefore, we believe, with property price stabilizing, this is already an ROE level our coverage universe can sustain without any need to leverage up their balance sheets again.

图表 5. Land acquisition pace has slowed for most companies under our coverage Land acquisition cost, total acquisition amount as % of contract sales

图表 6. Growth of debt in 1H15 once again is lower than

contract sales growth Sector total debt and total contract sales yoy growth

Source: Company data, CREIS. Note: ROE number on 1H2015 is the average ROE during 2015E-2017E

assuming no new investment from end-1H15 and no reduction of debt during 2015E-2017E.

Source: Company data, Gao Hua Securities Research.

Our cash flow breakdown analysis in Exhibit 6 also indicates that the financial positions of our covered companies (such as cash balance/debt to be repaid in 2016E) will be meaningfully improved in 2016 based on the assumption that construction capex for existing land bank will still grow about 5% but with lower land payment liabilities. On average, we assume 6% yoy contract sales growth in 2016E and the higher yoy increase of cash inflow is more due to collection of

prior-year sales.

0

1,000

2,000

3,000

4,000

5,000

6,000

0%

20%

40%

60%

80%

100%

120%

140%

160%

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

YTD

Sector avg. land acquisition amount as % of contract sales (LHS)

Sector avg. land acquisition cost (RHS)(Rmb/sqm)

0%

5%

10%

15%

20%

25%

0%

10%

20%

30%

40%

50%

60%

2010 2011 2012 2013 2014 1H2015

Sector total debt yoy% (LHS) Sector contract sales yoy% (LHS) Sector avg. ROE (RHS)

2015 年 10 月 5 日中国：开发商


图表 7. Cash balance/debt due to improve in 2016 Sector cash flow breakdown for 2015E-2016E

Note: The calculation of debt repayment amount in 2016E is the aggregate of each company’s debt to be due in 1-2 years reported by end-1H15. 15E cash balance is after financing cash flow.


Meanwhile, prices for China property high-yield bonds have recovered from their early September low since mid-September vs. the still-weak performance of high-yield bonds in other categories, including China non-property high yield.

Based on the end-1H15 debt profile for our coverage, total bonds maturing in 2H2015 amounts to US$1bn (0.4% of total debt of our sector by end-2015) and US$5.1bn in 2016 (2% of total debt of our coverage by end-2016) and the peak of the repayment is not coming until 1H19.

图表 8. Prices for China property high-yield bonds have recovered quickly since mid-September Weighted average bond prices for Asia high yield (rebased to 100 on Jan 2, 2015)

图表 9. FX bond repayment pressure for our coverage is

low in 2016 Aggregate overseas bond maturing profile for our coverage universe

Source: The Yieldbook, Inc, Citi Index, Goldman Sachs Global Investment Research.

Source: Company data.

But more price increase needed to support return recovery

0

200

400

600

800

1,000

1,200

1,400

1,600

1,800

2,000

15E 16E 15E 16E 15E 16E 15E 16E

Others

Div.

Int. exp

Tax

Cons

Land

Cash from

presales

Rental

income

Cash inflow Cash outflow End-period cash balance before

financing

Debt to be due(as% of end-1H15

total debt)

33% 14%

Other debt

Bond

(Rmb bn)

Ending

cash balance

Indonesia HY

India HY

China Property HY

China Non-

Property HY

85

90

95

100

105

110

115

Jan-15 Feb-15 Mar-15 Apr-15 May-15 Jun-15 Jul-15 Aug-15 Sep-15

0

5

10

15

20

25

30

35

40

2016 1H 2016 2H 2017 1H 2017 2H 2018 1H 2018 2H 2019 1H 2019 2H 2020 1H 2020 2H

(Rmb bn)

2015 年 10 月 5 日中国：开发商


As mentioned earlier, we expect our coverage universe to maintain an average ROE of 14% (off-shore 13% and on-shore 20%) in 2015E-2017E from their existing land bank. This is also based on our forecast for the capitalization ratio to improve slightly to 25% from 23% at end-1H15.

Upside to our ROE estimate will mainly come from re-leverage and/or more property price appreciation. However, without higher property price increase potential, we view re-leverage before end-2016 as still risky. As shown in Exhibit 11, land price as a percentage of ASP has been steadily increasing for most cities and Shanghai/Beijing stands out with the most rapid ratio increase (Shenzhen is not included due to very limited primary land sales). Therefore, if property prices do not increase, re-leverage will not only be a dilution to developers’ ROE from existing

land bank but also add renewed balance sheet risks.

图表 10. Property prices have been on a recovery trend since May 70-city property price index

图表 11. Land prices as a percentage of ASP keeps rising,

squeezing developers’ profitability and return Land cost as % of ASP breakdown by city tier

Source: NBS.

Source: CREIS.

-15

-10

-5

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15

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/08

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/09

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Primary ASP mom%-LHS Primary ASP yoy%-RHS

0%

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10%

15%

20%

25%

30%

35%

40%

45%

2011 2012 2013 2014 2015YTD

BJ&SH land cost as % of ASP

Provincial capitals land cost as % of ASP

Other major cities land cost as % of ASP

Low tier cities land cost as % of ASP

2015 年 10 月 5 日中国：开发商


Rmb devalue impact: Moderate on book value; more on earnings

Post the sudden renminbi fixing devaluation (reform) on August 11, share prices for our off-shore coverage universe fell 17% on average vs. the 14% decline for the MSCI China index. On top of

the weakened confidence on China’s growth outlook and policy makers’ ability to manage

risks, we note that our offshore coverage is still relatively highly levered on FX debt (mostly

in USD/HKD). As our economists expect the renminbi fixing to gradually weaken, reflecting a

strong US dollar, below we present a renminbi depreciation sensitivity analysis for our coverage universe’s earnings, book value and cash flow. Our onshore coverage will be less impacted given its minor exposure to the current mismatch between assets and liabilities.

As shown in Exhibit 12, we estimate a 10% depreciation of the renminbi against the US$/HK$ will lead to on average 5% impact on our 2016E underlying profit forecast for our coverage, with Shui On Land, Poly HK and COGO affected the most, mainly due to their small earnings base and/or

high leverage through FX debt. The impact on 2016E book value excluding revaluation gain would be mild with an average of 4%. Companies suffering higher impact are COGO, Franshion, and CRL, mainly due to higher translation loss. Meanwhile, average 2016E net gearing for our coverage will increase by 3pp from our base case of 47%.

图表 12. Direct impact from renminbi depreciation is moderate on our 2016E underlying profit forecast and book value estimate Average FX debt exposure, P&L, book value, net gearing impact from 10% Rmb depreciation

Note: Book value already excludes cumulative revaluation gain that is not cash income for developers.


31%

3%

-5%

-4%

-5%

-5%

-4%

-4%

-3%

-3%

-2%

-2%

-1%

-1%

0%0%

10%

20%

30%

40%

50%

60%

FX debt exposure Net gearing Underlying profit Book value

Avg. FX deb as % of total (LHS) Base case net gearing (LHS)

% increase of net gearing (LHS) % chg from base financials (RHS)

2015 年 10 月 5 日中国：开发商


We expect valuations to align with last cycle recovery phase

图表 13. We adjust underlying EPS for several names by -13% to +19% for 15-17E and end-15E NAV by -6% to +6% Summary of our end-15E NAV and 15E-17E underlying EPS changes


Summary of reasons for NAV/EPS changes

COGO: We cut 2015-17E underlying EPS by 5%/13%/12% on 0.4pp-1.1pp lower NM to reflect a still-tough environment for its operations in some tier-3 cities with a less favorable supply-demand dynamic. After factoring in slower turnover for its mega-sized projects (i.e., in Yinchuan, Ganzhou, etc.), we revise down end-2015E NAV by 6% to HK$7.28

COLI: We revise up 2015-17E underlying EPS by 1%/8%/19% after increasing ASPs for select projects in tier-1 and tier-2 cities by 5%-7% and raising contracted sales by 8%/16% assuming a better sell-through rate for projects with favorable supply/demand profiles. Correspondingly, we raise our end-2015E NAV by 6% to HK$31.4.

CRL: We raise 2015-17E underlying EPS by 3%/11%/14% after increasing ASPs by 2%-3% for select projects in tier-1 and tier-2 cities with a favorable supply/demand profile and our

2016E-17E completion pipeline by 10%/13% given recovering development activities. Correspondingly, we raise our end-2015E NAV by 3% to HK$28.7.

Ticker LCY New OldChg (%) 2015E 2016E 2017E 2015E 2016E 2017E

Offshore coverageAgile 3383.HK (HK$) 13.7 13.7 0 0.7 0.7 1.0 0% 0% 0%

Vanke H 2202.HK (HK$) 25.2 25.2 0 1.9 2.3 2.5 0% 0% 0%

CML 0978.HK (HK$) 2.1 2.1 0 0.1 0.2 0.2 0% 0% 0%

COGO 0081.HK (HK$) 7.3 7.8 -6 0.5 0.5 0.5 -5% -13% -12%

COLI 0688.HK (HK$) 31.4 29.6 6 2.8 3.2 3.4 1% 8% 19%

CRL 1109.HK (HK$) 28.7 27.9 3 1.9 2.2 2.3 3% 11% 14%

Country Garden 2007.HK (HK$) 6.9 6.9 0 0.4 0.5 0.5 0% 0% 0%

Evergrande 3333.HK (HK$) 8.9 8.9 0 0.6 0.4 0.4 0% 0% 0%

Franshion 0817.HK (HK$) 4.0 3.9 0 0.2 0.3 0.2 0% 0% 0%

Greentown 3900.HK (HK$) 14.0 14.0 0 1.1 1.2 1.0 0% 0% 0%

R&F 2777.HK (HK$) 17.9 19.0 -6 1.4 1.7 1.6 -1% -10% -2%

KWG 1813.HK (HK$) 12.4 12.4 0 1.0 1.2 1.2 0% 0% 0%

Longfor 0960.HK (HK$) 23.7 23.7 0 1.2 1.3 1.3 0% 0% 0%

Poly Property (H) 0119.HK (HK$) 9.5 9.5 0 0.0 0.1 0.1 0% 0% 0%

Red Star Macalline 1528.HK (HK$) 16.1 16.1 0 0.7 0.8 0.9 0% 0% 0%

Shimao 0813.HK (HK$) 29.7 29.5 1 2.1 2.5 2.6 0% 10% 17%

Shui On Land 0272.HK (HK$) 5.3 5.3 0 0.5 0.0 0.1 0% 0% 0%

Sino Ocean 3377.HK (HK$) 10.4 10.4 0 0.5 0.5 0.6 0% 0% 0%

SOHO 0410.HK (HK$) 8.2 8.2 0 0.2 0.2 0.2 0% 0% 0%

Sunac 1918.HK (HK$) 11.2 11.2 0 1.0 1.2 1.3 0% 1% 10%

Wanda 3699.HK (HK$) 88.7 88.7 0 4.0 4.8 5.6 0% 0% 0%

Yanlord YNLG.SI (S$) 2.5 2.5 0 0.4 0.5 0.6 0% 0% 0%

Offshore average 0 1.1 1.2 1.3 0% 0% 2%Onshore coverageCFLD 600340.SS (Rmb) n.m. n.m. n.m. 1.8 2.4 3.1 0% 0% 0%

Gemdale 600383.SS (Rmb) 13.3 13.3 0 0.8 0.9 0.8 0% 0% 0%

OCT 000069.SZ (Rmb) 16.2 16.2 0 0.7 0.9 1.0 0% 0% 0%

Poly A 600048.SS (Rmb) 11.6 11.6 0 1.3 1.4 1.6 0% 0% 0%

SMC 600823.SS (Rmb) 14.4 14.4 0 1.0 1.2 1.1 0% 0% 0%

Vanke A 000002.SZ (Rmb) 20.7 20.7 0 1.9 2.3 2.5 0% 0% 0%

Onshore average 0 1.2 1.5 1.7 0% 0% 0%

Underlying EPS Chg(%)NAV chg (LCY)

2015 年 10 月 5 日中国：开发商


R&F: We revise down 2015-17E underlying EPS by 1%/10%/2% after lowering 2015-17E net margin by 0.2-1.3pp by cutting ASP for projects with weaker supply and demand dynamics, in line with management guidance. Accordingly, we lower our end-2015E NAV by 6% to

HK$17.9.

Shimao: We raise 2016-17E underlying EPS by 10%/17% after revising up our 2016E-17E contracted sales by 7%/16% assuming a better sell-through rate for projects with favorable supply/demand profiles. Correspondingly, we raise our end-2015E NAV by 1% to HK$29.7.

Sunac: We raise 2016E-17E underlying EPS by 1%/10% after factoring in a 3%/7% presales upgrade to Rmb72bn/75bn in 2016E-17E on the addition of eight projects and reduced

financing cost to reflect cheaper funding Sunac obtained onshore.

Removing “A share valuation element” for our offshore coverage

In May, we revised the valuation framework we use for our offshore coverage universe by adopting part of the valuation framework we used for on-shore coverage universe, which at that time was trading at a 2015 P/B premium of about 40% over our offshore names (see Offshore moving closer to onshore; valuation change drives up TPs, May 10, 2015). At that time, we

changed the purely NAV-discount based valuation methodology for our offshore coverage to half

NAV-discount, half P/B-ROE valuation of our A share coverage.

图表 14. Valuation gap narrowed between our offshore and onshore coverage after the July A-share market turbulence Rolling P/B valuation of our on/off-shore coverage

图表 15. During this period of convergence, the relative performance against the respective index for our off-shore coverage was slightly better Relative performance against local index for on/off-shore coverage

Source: Datastream, company data, Gao Hua Securities Research.

Source: Datastream, company data, Gao Hua Securities Research.

P/B valuation gap between our off-shore and on-shore coverage has narrowed substantially since the A-share market turbulence in July (see Exhibit 14). With intensified macro concerns, delayed HK-SZ stock market connection as well as an uncertain depreciation path for the renminbi, we believe the A-share market could remain highly volatile, blurring Hong Kong’s potential valuation catch-up to the A share market.

Therefore, we have removed the “A-share valuation element” from the target price calculation for our off-shore coverage. Our target prices are now based solely on NAV discount by 1) making reference to the historical NAV discounts during the 2012-1H13 industry recovery and early expansion phase, and by cross checking our target-price-implied average 2015E-2017E P/B against each stock’s ROE quartile and leverage change in this cycle from the last cycle to further modify the NAV discount we assume in each case. Exhibit 16 summarizes how we are revising

the target price NAV discounts for our offshore coverage and the corresponding changes to our

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

4.5

5.0

Onshore 12m trailing P/B (x) Offshore 12m trailing P/B ex. revaluation (x)

Slowdown

Contraction

Recovery

Expansion

Slowdown

Contraction

Recovery

Expansion

Contraction

Recovery

-40

-20

0

20

40

60

80

Relative performance of Wind A share property index vs CSI300

Relative performance of offshore property index vs MSCI China

Slowdown

Contraction

Recovery

Expansion

Slowdown

Contraction

Recovery

Expansion

Contraction

Recovery

Price index

2015 年 10 月 5 日中国：开发商


target prices. Our NAV estimates are largely unchanged as we are not revising our price assumptions (flat in 2015-2016 vs. 2014). For companies with NAV discounts that are different from the last recovery cycle, we add comments in Exhibit 17. The changes are mainly because of

deteriorated/improved ROE quartile or balance sheet or both.

图表 16. China property offshore coverage: Summary of our ratings, TP changes and TP-implied upside/downside


图表 17. Summary of our offshore target price NAV discount change and reasons


Ticker LCY New Old New OldChg

(ppts)New Old

Chg (%)

Shr price as of

Sep 25

Upside/

downside

Offshore coverageAgile 3383.HK (HK$) Buy* Buy* -40% -30% -10 8.20 9.60 -15 3.91 110%Shimao 0813.HK (HK$) Buy* Neutral -20% -20% 0 23.70 23.60 0 11.48 106%Sunac 1918.HK (HK$) Buy Neutral -30% 0% -30 7.90 11.20 -29 4.18 89%Shui On Land 0272.HK (HK$) Buy Buy* -40% -20% -20 3.20 4.00 -20 1.75 83%Country Garden 2007.HK (HK$) Buy Buy -30% -20% -10 4.80 5.50 -13 2.70 78%KWG 1813.HK (HK$) Buy Buy -30% -20% -10 8.70 9.90 -12 5.03 73%COLI 0688.HK (HK$) Buy Neutral 20% 10% 10 37.60 32.60 15 23.55 60%Wanda 3699.HK (HK$) Buy Buy -20% -10% -10 71.00 79.80 -11 44.65 59%CRL 1109.HK (HK$) Neutral Neutral 0% 0% 0 28.70 27.90 3 18.56 55%COGO 0081.HK (HK$) Neutral Neutral -50% -30% -20 3.60 5.40 -33 2.34 54%R&F 2777.HK (HK$) Neutral Neutral -40% -40% 0 10.80 11.40 -5 7.11 52%Sino Ocean 3377.HK (HK$) Neutral Neutral -40% -40% 0 6.30 6.30 0 4.21 50%Greentown 3900.HK (HK$) Neutral Neutral -40% -20% -20 8.40 11.20 -25 5.67 48%Red Star Macalline 1528.HK (HK$) Neutral Neutral -10% -10% 0 14.20 14.20 0 9.63 47%Franshion 0817.HK (HK$) Neutral Neutral -30% -20% -10 2.80 3.20 -13 1.94 44%Longfor 0960.HK (HK$) Neutral Neutral -40% -30% -10 14.20 16.60 -14 9.84 44%Vanke H 2202.HK (HK$) Neutral Neutral -5% -5% 0 23.90 23.90 0 16.62 44%Yanlord YNLG.SI (S$) Neutral Buy -40% -30% -10 1.50 1.70 -12 1.05 44%SOHO 0410.HK (HK$) Neutral Neutral -50% -30% -20 4.10 5.70 -28 3.04 35%Poly Property (H) 0119.HK (HK$) Neutral Buy -70% -30% -40 2.90 6.70 -57 2.20 32%CML 0978.HK (HK$) Neutral Neutral -20% 0% -20 1.70 2.20 -23 1.35 26%Evergrande 3333.HK (HK$) Sell Sell -50% -50% 0 4.50 4.50 0 4.46 1%Offshore average -10 -13 56%


Rating chg TP NAV discount TP chg

Historical NAV disc

Old Newchg from

old Avg 12-1H13 Comment

(pp)

Offshore

Agile 3383.HK -30% -40% -10 -44%In line with last recovery cycle (12-1H13) avg NAV disc and also align TP implied avg 15-17E P/B vs. ROE prem/disc to

sector trend line with 12-1H13 given similar ROE quartile

Vanke (H) 2202.HK -5% -5% 0 n.a.

CML 0978.HK 0% -20% -20 n.a. Short-listing history; align TP implied avg 15-17E P/B vs. ROE at par to sector trend line given its avg return profile

COGO 0081.HK -30% -50% -20 -25%De-rated on deteriorating ROE & rising leverage; TP implied avg 15-17E P/B vs. ROE disc to sector trend line in line with

avg disc for stocks generating same 3rd quartile ROE

COLI 0688.HK 10% 20% 10 -7%Re-rating to reflect better scale growth outlook and also align TP implied avg 15-17E P/B vs. ROE prem to sector trend

line with 12-1H13 given leading ROE quartile

CRL 1109.HK 0% 0% 0 -14% In line with avg 2009 to reflect strong industry positioning

CG 2007.HK -20% -30% -10 -34% Same as Agile

Evergrande 3333.HK -50% -50% 0 -53%

China Jinmao 0817.HK -20% -30% -10 -34% Same as Agile

Greentown 3900.HK -20% -40% -20 -44% Same as Agile

R&F 2777.HK -40% -40% 0 -41%

KWG 1813.HK -20% -30% -10 -33% Same as Agile

Longfor 0960.HK -30% -40% -10 -37%

Poly (H) 0119.HK -30% -70% -40 -46% De-rated on deteriorating ROE & rising leverage, and slower than expected execution recovery

Shimao 0813.HK -20% -20% 0 -32% Re-rated on improving ROE quartile & deleveraging

Shui On Land 0272.HK -20% -40% -20 -54% Re-rated on improving asset churn outlook & deleveraging

Sino Ocean 3377.HK -40% -40% 0 -43%

SOHO 0410.HK -30% -50% -20 -41%Reflecting challenge outlook of its business model shift to landlord as well as cashflow constrain to maintain previous

high dividend yield

Sunac 1918.HK 0% -30% -30 -43% Re-rated on sector leading ROE and also align TP implied avg 15-17E P/B vs. ROE disc to sector trend line with 12-1H13

Wanda 3699.HK -10% -20% -10 n.a. Short-listing history; align TP implied avg 15-17E P/B vs. ROE prem to sector trend line with similar level of CRL

Yanlord YNLG.SI -30% -40% -10 -40% Same as Agile

Average -20% -30% -10 -40%

TP disc to NAV

2015 年 10 月 5 日中国：开发商


图表 18. We cross-check our target prices by looking at target price implied P/B against ROE quartile and leverage change in this cycle vs. the last industry recovery cycle Premium/discount against P/B-ROE trend line during different industry phases since 2H10


图表 19. Our offshore coverage universe P/B-ROE trend line during the last recovery cycle

图表 20. Our target price implied P/B-ROE trend line for

2015E-2017E

Source: Company data, Gao Hua Securities Research. Note: If we exclude Wanda, the best-fit line will be y=5.4x+0.4 (R2=0.5).


Restacking our A-share coverage by same methodology, benchmark to same historical period

We use NAV as the primary valuation methodology when setting 12-month target prices for our

onshore coverage. However, the discounts to NAV are set based on the target price implied P/B-ROE. For consistency vs. our offshore coverage valuation framework, we also set our target price implied P/B-ROE for the same time period (2015E-2017E) in line with 2012-1H13 as shown by Exhibit 21. There is no change to the relative premium/discount against the trend line on individual names to that of last cycle, as the relative ROE quartile and leverage are similar to the last recovery cycle. Our target price implied P/B of 2.1X is slightly lower than the previous cycle,

reflecting the moderately declining ROE trend.

2H10-11 downcycle

12-1H13 recovery

cycle

2H13-14 downcycle

15-17E 15-17E12-

1H13 15-17E 15-17E

Avg Avg Avg Current

TP

implied Avg Current TP implied 10-11 12-13 13-14 15E-17E 10-11 12-13 13-14 15E-17E

OffshoreAgile 0% -20% -30% -40% -20% 1.2 0.4 0.8 22.8% 18.0% 16.0% 9.6% 56% 79% 97% 49%

COGO 0% 20% 10% -30% -30% 3.2 0.4 0.7 46.0% 38.6% 24.0% 10.0% 11% 18% 57% 44%

COLI 30% 30% 30% 30% 30% 2.1 1.1 1.9 23.9% 22.0% 22.1% 16.8% 27% 24% 28% -8%

CRL 40% 50% 40% 50% 50% 1.9 1.2 1.9 11.4% 14.7% 14.9% 14.6% 60% 40% 38% 20%

CG 0% -10% 10% -20% -10% 1.4 0.7 1.2 19.5% 20.3% 19.1% 16.1% 48% 58% 63% 44%

Evergrande 0% -10% -20% 50% -10% 1.6 1.3 1.4 39.0% 25.4% 23.9% 17.7% 61% 116% 199% 236%

Jinmao 10% 10% 10% 20% 10% 1.0 0.6 0.9 5.7% 8.9% 10.2% 7.8% 30% 52% 66% 51%

Greentown -40% -40% -20% -40% -40% 0.9 0.4 0.6 17.4% 20.0% 14.7% 9.6% 141% 66% 82% 71%

R&F -10% -30% -10% -30% -40% 1.3 0.5 0.8 26.8% 25.9% 20.1% 15.1% 89% 101% 146% 81%

KWG -10% -30% -30% -30% -30% 1.1 0.6 1.0 15.8% 16.6% 16.6% 16.5% 55% 60% 62% 47%

Longfor 70% 30% 20% 20% 10% 2.3 1.0 1.4 25.6% 24.8% 21.4% 15.9% 40% 51% 57% 22%

Poly H -10% 0% -20% 0% -10% 0.8 0.3 0.4 11.0% 7.9% 3.8% 0.9% 76% 87% 98% 105%

Shimao -10% 0% 10% -30% 0% 1.5 0.7 1.4 16.6% 18.2% 19.7% 17.7% 75% 57% 58% 25%

SOL -20% 20% 20% -10% 20% 0.6 0.4 0.8 5.4% 2.2% 1.6% 6.8% 66% 85% 91% 103%

Sino-Ocean 0% 0% 0% 0% 0% 1.1 0.7 1.0 8.0% 10.5% 10.5% 10.8% 49% 64% 65% 42%

Yanlord 10% 20% 0% 20% 20% 0.9 0.6 0.8 8.5% 7.7% 6.1% 6.3% 43% 36% 41% 10%

Sunac -40% -30% -30% -40% -30% 1.3 0.6 1.0 30.8% 27.0% 26.4% 20.3% 68% 74% 57% 51%

Wanda n.a. n.a. 30% 40% 50% n.a. 1.3 2.0 18.6% 20.1% 18.6% 17.3% 39% 51% 55% 57%

CML n.a. n.a. 0% 30% 0% n.a. 0.9 1.1 n.m. 13.8% 10.8% 11.3% n.a. 39% 23% 44%

Avg 1.4 0.7 1.1 19.6% 18.0% 15.8% 12.7% 57% 61% 73% 58%

P/B prem/disc to sector trend line P/B (X) ROE quartile Net gearing (treat PCS as debt)

Agile

COGO

COLI

CRL

CG

Evergrande

Jinmao Greentown

R&F

KWG

Longfor

Poly H

Shimao

SOL

Sino-Ocean

Yanlord

Sunac

y = 6.1x + 0.4

R² = 0.6

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

0% 10% 20% 30% 40% 50% 60%

Historical PB vs. ROE Best-fit line Through 0,0 line(X)

20

12

-1H

13

av

g P

/B

2012-13 avg ROE

AgileCOGO

COLI

CRL

CGEvergrande

Jinmao

Greentown

R&F

KWG

Longfor

Poly H

Shimao

SOL

Sino-OceanYanlord

Sunac

Wanda

CML

y = 6.1x + 0.3

R² = 0.5

0.0

0.5

1.0

1.5

2.0

2.5

3.0

0% 5% 10% 15% 20% 25% 30% 35%

New TP implied Best-fit line Through 0,0 line(X)

20

15

E-2

01

7E

P/B

2015E-17E avg ROE

2015 年 10 月 5 日中国：开发商


图表 21. Our A-share valuation target price NAV discount is based on the target price implied P/B-ROE Summary of our A-share valuation and target price changes


图表 22. Our onshore coverage universe P/B-ROE trend line during the last recovery cycle

图表 23. Our target price implied P/B-ROE trend line for

2015E-2017E



Ticker LCY New Old New OldChg (%)

New OldChg

(ppts)New Old

Chg (%)

Shr price as of

Sep 25

Upside/

downside

Onshore coveragePoly A 600048.SS (Rmb) Buy Buy 11.6 11.6 0 5% 15% -10 12.20 13.30 -8 8.02 52%CFLD 600340.SS (Rmb) Buy Buy n.m. n.m. n.m. n.m. n.m. n.m. 34.70 38.60 -10 22.82 52%Vanke A 000002.SZ (Rmb) Buy* Buy* 20.7 20.7 0 -5% -5% 0 19.60 19.60 0 12.90 52%OCT 000069.SZ (Rmb) Buy Buy 16.2 16.2 0 -35% -20% -15 10.50 12.70 -17 7.16 47%SMC 600823.SS (Rmb) Neutral Neutral 14.4 14.4 0 -20% -10% -10 11.50 13.00 -12 9.82 17%Gemdale 600383.SS (Rmb) Sell Sell 13.3 13.3 0 -35% -30% -5 8.70 9.30 -6 12.21 -29%Onshore average 0 -8 -9 32%


Rating chg NAV chg (LCY) TP NAV discount TP chg

2H10-11 downcycle

12-1H13 recovery

cycle

2H13-14 downcycle

15-17E 15-17E12-

1H13 15-17E 15-17E

Avg Avg Avg Current

TP

implied Avg Current TP implied 10-11 12-13 13-14 15E-17E 10-11 12-13 13-14 15E-17E

OnshoreGemdale -20% 30% 40% 70% 30% 1.1 1.6 1.1 16.6% 11.2% 10.6% 11.5% 46% 36% 51% 37%

OCT 20% 10% 10% 0% 10% 2.3 1.4 2.0 23.6% 20.7% 19.3% 17.9% 100% 56% 43% 42%

Poly (A) -10% -20% -40% -30% -20% 1.9 1.0 1.6 19.0% 22.3% 22.2% 19.5% 78% 92% 101% 60%

SMC 20% 30% 10% 0% 30% 1.2 1.0 1.1 9.9% 9.8% 9.8% 11.3% 35% 34% 35% 25%

Vanke (A) -10% -20% -20% -30% -20% 1.8 1.2 1.8 18.8% 21.5% 20.3% 21.7% 24% 28% 18% -52%

CFLD n.a. 10% 10% 10% 10% 5.0 3.2 4.9 n.m. 39.5% 46.3% 37.5% n.a. 62% 84% 45%

Avg 2.2 1.6 2.1 17.6% 20.8% 21.4% 19.9% 57% 51% 55% 26%

P/B prem/disc to sector trend line P/B (X) ROE quartile Net gearing (treat PCS as debt)

y = 13.0x - 0.5

R² = 0.9

0.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

0% 10% 20% 30% 40% 50% 60%

Historical PB vs. ROE Best-fit line Through 0,0 line(X)

20

12

-1H

13

av

g P

/B

2012-13 avg ROE

Gemdale

OCT

Poly (A)

SMC Vanke (A)

CFLD

y = 14.1x - 0.7

R² = 0.9

0.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

0% 10% 20% 30% 40% 50% 60%

New TP implied Best-fit line Through 0,0 line(X)

20

15

-20

17

E P

/B

2015-17E avg ROE

Gemdale

OCT

Poly (A)SMC

Vanke (A)

CFLD

2015 年 10 月 5 日中国：开发商


图表 24. Summary of key risks for our coverage

Source: Gao Hua Securities Research.

Valuations pricing in meaningful asset deflation

Our off-shore coverage universe is trading at an average 55% NAV discount and 2015E P/B of 0.9X, close to the cycle trough averages of 53% and 1.0X. We believe such distressed valuations are not only pricing in zero growth (for most companies) but also substantial declines in China land prices.

Japan land prices have undergone a prolonged declining trend since the bubble burst in 1990. From peak to trough, land prices fell 66% during 1991-2015. However, land prices did not decline at all during the mid-1970s to the late-1980s when Japan’s GDP growth slowed from over 20% to the low single digits. As we believe the Chinese economy will remain in a moderate-growth phase for the coming years, not a deflationary one, China land prices are unlikely to see any meaningful year-on-year declines in the coming years, in our view.

Ticker

Offshore coverageAgile 3383.HK

Shimao 0813.HK

Sunac 1918.HK

Shui On Land 0272.HK

Country Garden 2007.HK

KWG 1813.HK Sales/margin miss & unexpected impact from anti-corruption

COLI 0688.HK

Wanda 3699.HK Worse than expected rental income/property sales; weak execution on asset light model

CRL 1109.HK Property sales/margin miss (-)/beat (+); Better(+)/worse(-) than expected rental growth

COGO 0081.HK Property sales/margin miss (-)/beat (+); positioning within the COLI group key to watch for

R&F 2777.HK Stronger(+)/weaker(-)-than-expected asset turnover/balance sheet

Sino Ocean 3377.HK Stronger (+) or weaker (-) than expected sales performance and margins

Greentown 3900.HK Synergy with CCCG; faster-/slower-than-expected recovery of high-end markets

Red Star Macalline 1528.HK Brand equity, cash flow management for PM, evolving online competition and dividend payout

Franshion 0817.HK Better/worse-than-expected property sales/margin

Longfor 0960.HK Weaker/stronger-than-expected sales; hard macro landing

Vanke H 2202.HK Weaker-thanexpected sales performance, macro hard landing

Yanlord YNLG.SI Unexpected strong sales performance/policy easing in high-end market (+); margin miss

SOHO 0410.HK Rental performance (+/-) and execution slippage

Poly Property (H) 0119.HK Sales/margin miss (-)/beat (+); faster/slower than expected restructuring progress with Poly A

CML 0978.HK Presales/margin performance (+/-); diminishing support from its parent

Evergrande 3333.HK Better-thanexpected margins/balance sheet

Onshore coveragePoly A 600048.SS Weaker-than-expected sales performance

CFLD 600340.SS Slow local government execution, macro hard landing

Vanke A 000002.SZ Weaker-thanexpected sales performance, macro hard landing

OCT 000069.SZ Slowdown in economic activity; inability to improve operation of tourism business

SMC 600823.SS Presales (+/-) and execution of its diversified business; disposal of investment properties

Gemdale 600383.SS Better-than-expected sales/margins

Slower than expected turnaround in profitability; miss step in expansion and thus lead to balance

sheet deterioration

Sales/margin misses; delay in commercial enbloc sales

Sales/margin misses; failure in overseas investment

Weaker than expected margins; macro hard landing

Property sales/margin miss or any follow-on anti-corruption investigation on Chairman

Key risks

Weaker-than-expected sales/margin performance; undisciplined reinvestment that leads to balance

sheet deterioration

2015 年 10 月 5 日中国：开发商


图表 25. Land prices in Japan did not begin declining until Japan entered into a long deflationary cycle after the early 1990s Japan land price yoy change and nominal GDP growth

图表 26. Average land price in China has been rising

China land price yoy change and nominal GDP growth

Source: CEIC, World Bank, Japan Real Estate Institute.

Source: Company data, Goldman Sachs Global Investment Research.

In order to assess how much asset deflation concerns have been priced in, we compared developers’ existing land bank cost (on a total interest basis) and mark-to-market land bank value (on a total interest basis) with their current EV. If a company’s EV is below its land cost, we believe the market not only assigns no value to its non-land assets such as buildings, account receivables, etc. but also assumes China land prices will fall in the longer-run.

We also divided our coverage universe into three groups based on their 2015E P/Bs. Among our total coverage of 28 companies, 14 have 2015E P/Bs of more than 1X, three are trading at 0.7X-1X, and 11 are trading below 0.7X.

As per Exhibit 27, land bank cost over EV ratio on average is in line with our off-shore sector’s P/B valuation level, but land bank value over EV ratio is highest for companies with 2015E P/Bs of 0.7X-1X. Companies that fall into this category are mostly top-ranked (in terms of scale)

property companies but are private. For a more detailed analysis, see the company snapshots and company appendix sections of this report.

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China GDP growth yoy% (LHS) China land price yoy% (RHS)

GS Estimate

2015 年 10 月 5 日中国：开发商


图表 27. Valuation has priced in very bearish expectation on property asset prices Land bank cost, land bank value (mark-to-market) vs. EV

Source: Company data, CREIS, Gao Hua Securities Research.

Key assumptions for Exhibit 27:

1. Land bank value by cost: We use company reported 1H15 total land bank GFA

multiplied by the average land cost per sqm as reported (or estimates from our model’s end-2014 unsold land bank cost if data is not available).

2. Land bank mark-to-market value: We break down the company’s total land bank

GFA by city according to their 1H15 result announcement (or estimates from our model if data is not available), then multiply by each city’s market land transaction price from CREIS.

3. Land transaction price: For most of the cities, we use the average land price from

CREIS for the last two years while for high-tier cities we use the one-year average price to better catch momentum. For low-tier cities whose land cost is not available in CREIS, we use the national average transaction price. For those with overseas exposure, we use the real transaction price at acquisition.

2015年

10月

5日

中国：开发商

全球

投资研究

18

图表 28. China developers’ valuation comparison

Notes: 1) * denotes the stock is on our regional Conviction List. (2) Our 12-month target prices are based on end-2015E NAV for developers. (3) Average P/E does not include SOHO, Poly HK and Shui On Land.

Source: Company data, Datastream, Gao Hua Securities Research.

Company Ticker

15E 16E 17E 15E 16E 17E 15E 16E 17E

Hong Kong listed

Agile 3383.HK 2.0 Buy* 3.91 (HK$) 8.20 110 -40% 13.65 (71) 4.7 4.5 3.1 0.4 0.4 0.3 6.4 6.6 9.5

China Vanke (H) 2202.HK 2.8 Neutral 16.62 (HK$) 23.90 44 -5% 25.20 (34) 7.2 5.9 5.5 1.5 1.2 1.1 4.9 5.9 6.3

Chi Mer Land 0978.HK 0.8 Neutral 1.35 (HK$) 1.70 26 -20% 2.15 (37) 8.4 6.3 6.2 1.0 0.9 0.8 1.4 1.8 1.9

COGO 0081.HK 0.7 Neutral 2.34 (HK$) 3.60 54 -50% 7.28 (68) 4.3 4.4 4.6 0.5 0.4 0.4 0.0 0.0 0.0

COLI 0688.HK 29.8 Buy 23.55 (HK$) 37.60 60 20% 31.35 (25) 8.3 7.5 7.0 1.3 1.1 1.0 2.2 2.7 2.9

CRL 1109.HK 16.5 Neutral 18.56 (HK$) 28.70 55 0% 28.75 (35) 9.5 8.3 8.0 1.3 1.2 1.1 3.0 3.5 3.6

CG 2007.HK 7.8 Buy 2.70 (HK$) 4.80 78 -30% 6.88 (61) 5.2 4.6 4.0 0.7 0.7 0.6 6.6 7.4 8.4

Evergrande 3333.HK 8.3 Sell 4.46 (HK$) 4.50 1 -50% 8.93 (50) 6.2 9.3 8.3 1.3 1.4 1.4 15.3 10.2 11.4

China Jinmao 0817.HK 2.7 Neutral 1.94 (HK$) 2.80 44 -30% 3.96 (51) 8.0 7.2 7.9 0.7 0.6 0.6 5.5 6.1 5.9

Greentown 3900.HK 1.6 Neutral 5.67 (HK$) 8.40 48 -40% 13.95 (59) 4.3 4.0 4.6 0.4 0.4 0.4 0.0 0.0 0.0

R&F 2777.HK 2.9 Neutral 7.11 (HK$) 10.80 52 -40% 17.94 (60) 4.1 3.5 3.6 0.6 0.5 0.5 8.6 9.9 9.7

KWG 1813.HK 1.9 Buy 5.03 (HK$) 8.70 73 -30% 12.38 (59) 4.0 3.6 3.5 0.6 0.6 0.5 7.8 8.4 8.6

Longfor 0960.HK 7.4 Neutral 9.84 (HK$) 14.20 44 -40% 23.70 (58) 6.7 6.4 6.3 1.1 1.0 0.9 4.6 3.9 4.0

Poly Property (H) 0119.HK 1.0 Neutral 2.20 (HK$) 2.90 32 -70% 9.54 (77) 61.3 24.9 25.7 0.3 0.3 0.3 0.6 0.4 0.4

Red Star Macalline 1528.HK 4.5 Neutral 9.63 (HK$) 14.20 47 -10% 16.09 (40) 11.3 9.7 9.1 1.8 1.6 1.5 4.4 5.1 5.5

Shimao 0813.HK 5.1 Buy* 11.48 (HK$) 23.70 106 -20% 29.66 (61) 4.5 3.8 3.6 0.7 0.7 0.6 6.7 7.9 8.3

Shui On Land 0272.HK 1.8 Buy 1.75 (HK$) 3.20 83 -40% 5.28 (67) n.m. n.m. n.m. 0.4 0.5 0.4 3.4 3.4 3.4

Sino Ocean 3377.HK 4.1 Neutral 4.21 (HK$) 6.30 50 -40% 10.44 (60) 7.3 6.6 5.6 0.8 0.7 0.6 4.7 4.5 5.4

SOHO China 0410.HK 2.0 Neutral 3.04 (HK$) 4.10 35 -50% 8.16 (63) 13.7 16.3 12.6 0.6 0.6 0.6 5.9 4.9 6.4

Sunac 1918.HK 1.8 Buy 4.18 (HK$) 7.90 89 -30% 11.25 (63) 3.3 2.8 2.6 0.6 0.5 0.5 5.0 6.1 6.6

Wanda 3699.HK 25.9 Buy 44.65 (HK$) 71.00 59 -20% 88.73 (50) 9.1 7.7 6.5 1.4 1.3 1.1 3.7 3.8 4.5

HK listed average 57 (55) 6.5 5.9 5.6 0.9 0.8 0.7 4.8 4.9 5.4

A-share listed

CFLD 600340.SS 9.4 Buy 22.82 (Rmb) 34.70 52 n.m. n.m. n.m. 12.8 9.5 7.3 4.3 3.1 2.2 0.8 1.0 1.4

Gemdale 600383.SS 8.6 Sell 12.21 (Rmb) 8.70 (29) -35% 13.34 (8) 14.8 13.7 14.7 1.7 1.6 1.4 1.0 1.1 1.0

OCT 000069.SZ 8.1 Buy 7.16 (Rmb) 10.50 47 -35% 16.22 (56) 10.1 7.5 7.0 1.6 1.3 1.1 1.1 1.4 1.5

Poly (A) 600048.SS 13.5 Buy 8.02 (Rmb) 12.20 52 5% 11.59 (31) 6.3 5.6 5.1 1.2 1.0 0.9 3.0 3.4 3.7

SMC 600823.SS 2.7 Neutral 9.82 (Rmb) 11.50 17 -20% 14.41 (32) 10.0 8.2 8.6 1.1 1.0 0.9 1.2 1.3 1.2

Vanke (A) 000002.SZ 19.6 Buy* 12.90 (Rmb) 19.60 52 -5% 20.66 (38) 6.8 5.6 5.2 1.4 1.2 1.0 5.2 6.2 6.7

Onshore average 32 (33) 8.7 7.2 6.8 1.6 1.3 1.1 1.7 2.1 2.2

Singapore listed

Yanlord YNLG.SI 1.6 Neutral 1.05 (S$) 1.50 44 -40% 2.45 (57) 12.0 9.3 7.9 0.6 0.6 0.5 1.3 1.7 2.0

Simple average of above 51 (51) 9.8 7.7 7.2 1.1 0.9 0.8 4.1 4.2 4.6

FD Core P/E (x)Target price

disc. to NAV

Potential upside/

downside (%)

End-15 NAV

Shr price (disc)/ prem to

NAV

12 mth Price target

Mkt Cap (US$ bn) Rating

Price as of

25/Sep/15

P/B (exclude revaluation gain) (x) Dividend yield (%)

2015 年 10 月 5 日中国：开发商


Company snapshots

Company snapshots

2015 年 10 月 5 日中国：开发商


Shimao: Stronger sales to support mean revision; up to Buy (CL)

Source of opportunity We upgrade Shimao to Buy from Neutral and add to our Conviction List, with a 12-month NAV-based target price HK$23.7, implying 106% potential upside vs. 56%average for our offshore coverage. We believe Shimao’s share price underperformance YTD (-34% vs. -12% for peers) has been mainly due to its lackluster sales growth YTD (first 8M running rate to its Rmb72bn (3% yoy)

contract sales guidance is 55% vs. sector average of 60%), as well as below-expectation margin reported in 1H. By trading at a 2015E-17E P/B of 0.7X vs. its 2015E-17E ROE of 18%, or a 20% discount to the sector P/B-ROE trend line vs. 0% in the last recovery, we believe the market has overlooked Shimao’s improving ROE quartile against peers and stable financial position. We also raise 2016-17E underlying EPS 10%-17% after upgrading 2016-17E

presales 7%/16% to Rmb76/78bn on the back of its strong project pipeline and management’s greater emphasis on asset churn. We keep our 12-month NAV-based target price largely unchanged at HK$23.7 by setting at 20% discount to end-2015E NAV, which aligns target price-implied 2015-17E P/B-ROE with the sector trend line (same as the last recovery cycle in 2012-1H13).

Catalyst 1. We expect Shimao’s presales performance to significantly pick up during

the rest of this year with average monthly sales 51% higher than 8M15 (vs. peers +35%) and thus deliver a 13% yoy growth for September-December 2015 (vs. peers flattish yoy). We also expect Shimao to deliver more

sustainable sales growth in the coming two years (+6% CAGR vs. no growth for peers on average) on the back of its product positioning (50%+ for upgrade need) and increased supply in tier-1/2 cities with better price outlooks (such as Shanghai, Beijing, Nanjing and Xiamen, etc.).

2. We believe Shimao’s later-year profitability will reflect: (1) increased ASP

of more than 100 projects nationwide to a varying extent since July-2015; (2)

better margin outlook for Shimao’s YTD new acquisitions (i.e., 40%+ GPM for its newly acquired Shanghai Nanjing Road project) and (3) reduced financing cost (to 6% from 7.4% at 2014). After the 3pp yoy decline of GPM to 31% in 1H15, management is confident FY15E GPM will be above 30%, and we expect margins to largely stabilize at this level for FY16E-17E.

3. Given that management budgets positive cash flow for 2015, we believe

Shimao can at least maintain its 30+% dividend payout ratio, implying 6.7% yield for FY15 based on the last closing price of HK$11.48.

Valuation Shimao is trading 29pp below the last recovery cycle, meaning an NAV discount of 32% and 2015E P/E and P/B of 4.5X/0.7X (a 31%/13% discount

to peers respectively). As such, we believe the risk-reward is significantly skewed to the upside given its solid fundamental outlook.

Key risks Weaker-than-expected sales/margin performance; undisciplined reinvestment that leads to balance sheet deterioration.

Growth

Returns *

Multiple

Volatility Volatility

Multiple

Returns *

Growth

Investment Profile

Low High

Percentile 20th 40th 60th 80th 100th

* Returns = Return on Capital For a complete description of the investment

profile measures please refer to the

disclosure section of this document.

Shimao Property (0813.HK)

Asia Pacific Property Peer Group Average

Key data Current

Price (HK$) 11.48

12 month price target (HK$) 23.70

Market cap (HK$ mn / US$ mn) 39,865.1 / 5,143.4

Foreign ownership (%) 40.2

12/14 12/15E 12/16E 12/17E

EPS (Rmb) 2.01 2.11 2.49 2.60

EPS growth (%) 5.2 5.0 17.9 4.7

EPS (diluted) (Rmb) 2.33 2.29 2.49 2.60

EPS (basic pre-ex) (Rmb) 2.34 2.29 2.49 2.60

P/E (X) 6.5 4.5 3.8 3.6

P/B (X) 1.0 0.6 0.6 0.5

EV/EBITDA (X) 6.4 5.8 4.1 3.1

Dividend yield (%) 5.4 6.7 7.9 8.3

ROE (%) 18.3 16.0 15.5 14.6

CROCI (%) 8.0 8.5 11.6 16.4

55

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20

Sep-14 Dec-14 Apr-15 Jul-15

Price performance chart

Shimao Property (L) MSCI China (R)

Share price performance (%) 3 month 6 month 12 month

Absolute (27.2) (28.4) (29.5)

Rel. to MSCI China (1.2) (13.9) (21.5)

Source: Company data, Goldman Sachs Research estimates, FactSet. Price as of 9/25/2015 close.

2015 年 10 月 5 日中国：开发商


Note: share price related numbers were as of Sep 25, 2015

Shimao Property: Summary financials

Profit model (Rmb mn) 12/14 12/15E 12/16E 12/17E Balance sheet (Rmb mn) 12/14 12/15E 12/16E

Total revenue 56,080.5 65,072.6 74,106.2 77,046.7 Cash & equivalents 20,471.8 25,774.4 46,704.0

Cost of goods sold (37,855.4) (45,679.8) (52,141.7) (54,056.3) Accounts receivable 12,457.2 14,454.6 16,461.3

SG&A (4,303.6) (4,880.4) (5,187.4) (5,393.3) Inventory 104,706.4 103,858.5 89,896.2

R&D -- -- -- -- Other current assets 19,250.4 19,353.2 19,461.1

Other operating profit/(expense) 1,247.7 736.8 0.0 0.0 Total current assets 156,885.9 163,440.7 172,522.6

EBITDA 15,756.1 15,620.3 17,153.7 17,965.5 Net PP&E 11,951.7 12,074.3 11,916.8

Depreciation & amortization (586.8) (371.1) (376.6) (368.3) Net intangibles 1,840.7 1,840.7 1,840.7

EBIT 15,169.3 15,249.2 16,777.0 17,597.1 Total investments 39,471.9 45,422.3 50,674.4

Interest income 171.6 204.7 257.7 467.0 Other long-term assets 10,383.2 10,902.4 11,447.5

Interest expense (412.1) (429.1) (414.4) (354.0) Total assets 220,533.5 233,680.4 248,401.9

Income/(loss) from uncons. subs. (174.5) (118.1) 248.6 315.6

Others 502.2 406.3 0.0 0.0 Accounts payable 29,866.3 31,287.5 35,713.5

Pretax profits 15,256.4 15,312.9 16,869.0 18,025.7 Short-term loans 18,689.4 17,636.8 17,636.8

Income tax (5,768.7) (6,057.0) (6,872.1) (7,182.0) Other current liabilities 59,385.9 58,722.4 60,740.1

Minorities (1,383.9) (1,319.6) (1,362.0) (1,804.2) Total current liabilities 107,941.6 107,646.7 114,090.4

Long-term debt 43,269.4 49,477.4 49,477.4

Net income pre-preferred dividends 8,103.8 7,936.3 8,634.9 9,039.5 Other long-term liabilities 4,339.4 4,773.3 5,250.6

Preferred dividends 0.0 0.0 0.0 0.0 Total long-term liabilities 47,608.7 54,250.7 54,728.0

Net income (pre-exceptionals) 8,103.8 7,936.3 8,634.9 9,039.5 Total liabilities 155,550.4 161,897.4 168,818.4

Post-tax exceptionals 0.0 0.0 0.0 0.0

Net income 8,103.8 7,936.3 8,634.9 9,039.5 Preferred shares 0.0 0.0 0.0

Total common equity 46,863.4 52,343.7 58,782.2

EPS (basic, pre-except) (Rmb) 2.34 2.29 2.49 2.60 Minority interest 18,119.7 19,439.3 20,801.2

EPS (basic, post-except) (Rmb) 2.34 2.29 2.49 2.60 Total liabilities & equity 220,533.5 233,680.4 248,401.9

EPS (diluted, post-except) (Rmb) 2.33 2.29 2.49 2.60 BVPS (Rmb) 13.50 15.07 16.93

DPS (Rmb) 0.71 0.63 0.75 0.78 RNAV (Rmb mn) -- 84,427.4 92,917.8

Dividend payout ratio (%) 30.2 27.7 30.0 30.0 RNAVPS (Rmb) -- 24.31 26.76

Free cash flow yield (%) (22.5) 13.1 49.9 62.1

Growth & margins (%) 12/14 12/15E 12/16E 12/17E Ratios 12/14 12/15E 12/16E

Sales growth 35.1 16.0 13.9 4.0 ROE (%) 18.3 16.0 15.5

EBITDA growth 32.3 (0.9) 9.8 4.7 ROA (%) 4.1 3.5 3.6

EBIT growth 32.0 0.5 10.0 4.9 ROACE (%) 10.1 8.6 9.5

Net income growth 9.7 (2.1) 8.8 4.7 Inventory days 862.3 833.3 678.2

EPS growth 9.8 (2.4) 8.8 4.7 Receivables days 77.0 75.5 76.1

Gross margin 32.5 29.8 29.6 29.8 Payable days 245.2 244.3 234.5

EBITDA margin 28.1 24.0 23.1 23.3 Net debt/equity (%) 58.5 52.8 21.3

EBIT margin 27.0 23.4 22.6 22.8 Interest cover - EBIT (X) 63.1 67.9 107.1

Cash flow statement (Rmb mn) 12/14 12/15E 12/16E 12/17E Valuation 12/14 12/15E 12/16E

Net income pre-preferred dividends 8,103.8 7,936.3 8,634.9 9,039.5 P/E basic (X) 6.5 4.5 3.8

D&A add-back 586.8 371.1 376.6 368.3 P/B (X) 1.0 0.6 0.6

Minorities interests add-back 1,383.9 1,319.6 1,362.0 1,804.2 EV/EBITDA (X) 6.4 5.8 4.1

Net (inc)/dec working capital (19,035.2) 271.7 16,381.6 20,969.2 Dividend yield (%) 5.4 6.6 7.8

Other operating cash flow (2,774.5) (733.3) 1,593.4 3,199.7

Cash flow from operations (11,735.2) 9,165.4 28,348.6 35,380.9

Underlying valuation 12/14 12/15E 12/16E

Capital expenditures (2,450.5) (2,299.1) (1,426.2) (806.5) Underlying profit (Rmb mn) 6,970.9 7,321.3 8,634.9

Acquisitions (1,842.3) 0.0 0.0 0.0 Underlying EPS (Rmb) 2.01 2.11 2.49

Divestitures 0.0 0.0 0.0 0.0

Others 4,097.7 (4,263.2) (3,796.4) (2,147.4) Underlying ROE (%) 15.7 14.8 15.5

Cash flow from investments (195.1) (6,562.3) (5,222.5) (2,953.9) Underlying ROA (%) 3.5 3.2 3.6

Underlying ROACE (%) 8.9 8.0 9.5

Dividends paid (common & pref) (2,684.4) (2,456.0) (2,196.4) (2,590.5) Underlying P/E (X) 6.5 4.5 3.8

Inc/(dec) in debt 14,090.2 5,155.4 0.0 (10,000.0) Underlying dividend payout (%) 35.2 30.0 30.0

Common stock issuance (repurchase) (75.1) 0.0 0.0 0.0 Underlying EPS growth (%) 5.2 5.0 17.9

Other financing cash flows 4,049.9 0.0 0.0 0.0

Cash flow from financing 15,380.6 2,699.4 (2,196.4) (12,590.5)

Total cash flow 3,445.8 5,302.5 20,929.6 19,836.5 Note: Last actual year may include reported and estimated data.

Source: Company data, Goldman Sachs Research estimates.

2015 年 10 月 5 日中国：开发商


COLI: Defensive quality shines through volatility; up to Buy

Source of opportunity We upgrade COLI to Buy from Neutral with 60% potential upside to our new

12-month target price of HK$37.6, which compares to average upside of 56% for our offshore coverage, and we believe its current valuation offers most attractive risk/reward among the high-quality large-cap names. Despite its deteriorating ROE (average of 17% in 2015-17E without new project additions vs. historical levels of 20%+) on lower profitability and growth vs. its historical levels, COLI still stands out on its relatively better growth outlook and margin

resilience, on the back of its geographically balanced land bank, solid execution track record, strict financial discipline and persistent efforts to improve product quality.

We revise up 2016E-17E underlying EPS by 8%/19% after factoring in 8%/16% presales upgrade to HK$199bn/197bn in 2016E-17E to reflect a better ASP appreciation outlook for its selective core-located projects in cities

with favorable supply-demand dynamics. Accordingly, we raise our end-2015E NAV and 12-month NAV-based target price by 6% to HK$31.35/HK$37.6, at a 20% premium over end-2015E NAV (10% previously) in order to align the target-price-implied 2015-17E P/B-ROE at the same 30% premium to the sector trend line across the different industry cyclephases.

Catalyst 1. Despite the potential margin dilution to COLI’s existing portfolio from its

parent’s asset injection (see Asset injection to boost topline; not enough to offset share dilution, April 20, 2015), we believe the enlarged portfolio

positively improves COLI’s scale growth visibility (we now project a presales CAGR of 5% in 2015-17E for COLI based on its existing portfolio vs. average no growth for peers), particularly against a backdrop of heating land prices in

higher-tier cities. Meanwhile, we believe COLI’s gross profit margin has already stabilized at around 30%, and above-expectation price increases in its core cities (HK, tier-1 and selective tier-2) present upside risk to our still below consensus underlying profit estimate.

2. The company is in the process of spinning off and listing its property

management business as a whole. We believe the successful listing of its

property management business will help unlock the value of this business for shareholders. Currently, global property management companies are on average trading at a 2015E P/E of 20X vs. COLI’s 8.3X. In 2014 and 1H15, COLI generated HK$103mn in profit from that business.

Valuation The shares are trading at a 25% discount to our end-2015E NAV and at 8.3X 2015E P/E, 1.3X 2015E P/B vs. last-cycle averages of -7%/8.6X/2.1X and

peer group (CRL, Vanke H and Wanda) averages of 40%/8.6X/1.4X, respectively.

Key risks Weaker-than-expected margins; macro hard landing.

Growth

Returns *

Multiple


Multiple

Returns *

Growth

Investment Profile

Low High





China Overseas Land & Investment (0688.HK)


Key data Current

Price (HK$) 23.55



Foreign ownership (%) --

12/14 12/15E 12/16E 12/17E

EPS (HK$) 2.92 2.82 3.16 3.36

EPS growth (%) 25.7 (3.2) 12.0 6.3

EPS (diluted) (HK$) 3.39 2.82 3.16 3.36

EPS (basic pre-ex) (HK$) 3.39 3.09 3.16 3.36

P/E (X) 7.2 8.3 7.4 7.0

P/B (X) 1.3 1.2 1.0 0.9

EV/EBITDA (X) 5.8 6.4 4.4 2.2

Dividend yield (%) 2.3 2.2 2.7 2.9

ROE (%) 22.7 16.7 14.7 14.0

CROCI (%) 29.5 6.5 22.3 27.7

55

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70

75

80

85

90

95

18

20

22

24

26

28

30

32

34



China Overseas Land & Investment (L) MSCI China (R)

Share price performance (%) 3 month 6 month 12 monthAbsolute (17.9) (1.9) 11.3

Rel. to MSCI China 11.4 18.0 23.9


2015 年 10 月 5 日中国：开发商



China Overseas Land & Investment: Summary financials

Profit model (HK$ mn) 12/14 12/15E 12/16E 12/17E Balance sheet (HK$ mn) 12/14 12/15E 12/16E 12/17E

Total revenue 119,997.0 151,041.0 174,222.2 189,462.0 Cash & equivalents 59,847.6 45,562.3 109,146.4 169,404.4

Cost of goods sold (80,759.3) (103,093.4) (120,522.2) (131,968.1) Accounts receivable 14,957.2 16,552.4 19,092.8 20,763.0

SG&A (3,454.7) (4,572.0) (4,106.8) (4,342.0) Inventory 247,117.4 283,812.1 220,715.0 145,596.5

R&D -- -- -- -- Other current assets 9,735.4 11,649.2 12,814.2 14,095.6

Other operating profit/(expense) 1,183.4 0.0 0.0 0.0 Total current assets 331,657.5 357,576.1 361,768.3 349,859.4

EBITDA 36,966.4 43,375.6 49,593.2 53,151.9 Net PP&E 1,377.6 1,658.4 1,976.8 2,309.6

Depreciation & amortization (115.5) (140.6) (167.6) (195.8) Net intangibles 109.0 109.0 109.0 109.0

EBIT 36,850.9 43,235.0 49,425.6 52,956.0 Total investments 18,915.7 26,244.6 33,064.0 39,094.6

Interest income 414.9 607.4 462.4 1,107.8 Other long-term assets 58,103.3 58,613.7 58,881.4 58,881.4

Interest expense (345.5) (409.4) (395.4) (284.9) Total assets 410,163.1 444,201.8 455,799.6 450,254.0

Income/(loss) from uncons. subs. 1,598.9 2,669.9 3,029.4 2,726.0

Others 5,148.2 0.0 0.0 0.0 Accounts payable 84,796.4 62,138.5 52,831.7 57,849.0

Pretax profits 43,667.4 46,102.9 52,522.1 56,504.9 Short-term loans 22,541.8 11,579.9 11,579.9 1,579.9

Income tax (15,462.0) (17,660.4) (20,423.1) (22,259.7) Other current liabilities 81,745.3 64,637.0 74,294.3 76,113.3

Minorities (525.2) (612.1) (931.7) (1,109.5) Total current liabilities 189,083.6 138,355.4 138,705.8 135,542.2

Long-term debt 74,816.0 93,444.4 78,826.2 48,826.2

Net income pre-preferred dividends 27,680.2 27,830.5 31,167.4 33,135.7 Other long-term liabilities 7,706.8 7,706.8 7,706.8 7,706.8

Preferred dividends 0.0 0.0 0.0 0.0 Total long-term liabilities 82,522.8 101,151.2 86,533.0 56,533.0

Net income (pre-exceptionals) 27,680.2 27,830.5 31,167.4 33,135.7 Total liabilities 271,606.3 239,506.6 225,238.8 192,075.2


Net income 27,680.2 27,830.5 31,167.4 33,135.7 Preferred shares 0.0 0.0 0.0 0.0

Total common equity 133,670.5 199,196.8 224,130.7 250,639.3

EPS (basic, pre-except) (HK$) 3.39 3.09 3.16 3.36 Minority interest 4,886.3 5,498.4 6,430.0 7,539.5

EPS (basic, post-except) (HK$) 3.39 3.09 3.16 3.36 Total liabilities & equity 410,163.1 444,201.8 455,799.6 450,254.0

EPS (diluted, post-except) (HK$) 3.39 2.82 3.16 3.36 BVPS (HK$) 16.35 20.20 22.73 25.42

DPS (HK$) 0.49 0.52 0.63 0.67 RNAV (HK$ mn) -- 309,141.0 340,420.4 --

Dividend payout ratio (%) 14.5 16.7 20.0 20.0 RNAVPS (HK$) -- 31.35 34.52 --

Free cash flow yield (%) 2.8 (22.1) 39.1 47.5

Growth & margins (%) 12/14 12/15E 12/16E 12/17E Ratios 12/14 12/15E 12/16E 12/17E

Sales growth 45.5 25.9 15.3 8.7 ROE (%) 22.7 16.7 14.7 14.0

EBITDA growth 51.0 17.3 14.3 7.2 ROA (%) 7.8 6.5 6.9 7.3

EBIT growth 51.2 17.3 14.3 7.1 ROACE (%) 17.7 12.9 13.5 19.2

Net income growth 20.1 0.5 12.0 6.3 Inventory days 974.7 939.9 764.0 506.6

EPS growth 20.1 (8.9) 2.4 6.3 Receivables days 38.0 38.1 37.3 38.4

Gross margin 32.7 31.7 30.8 30.3 Payable days 240.3 260.1 174.1 153.1

EBITDA margin 30.8 28.7 28.5 28.1 Net debt/equity (%) 27.1 29.0 (8.1) (46.1)

EBIT margin 30.7 28.6 28.4 28.0 Interest cover - EBIT (X) NM NM NM NM

Cash flow statement (HK$ mn) 12/14 12/15E 12/16E 12/17E Valuation 12/14 12/15E 12/16E 12/17E

Net income pre-preferred dividends 27,680.2 27,830.5 31,167.4 33,135.7 P/E basic (X) 7.2 8.3 7.4 7.0

D&A add-back 115.5 140.6 167.6 195.8 P/B (X) 1.3 1.2 1.0 0.9

Minorities interests add-back 525.2 612.1 931.7 1,109.5 EV/EBITDA (X) 5.8 6.4 4.4 2.2

Net (inc)/dec working capital (30,304.8) (58,639.1) 51,249.9 78,465.8 Dividend yield (%) 2.3 2.2 2.7 2.9

Other operating cash flow 7,029.6 (17,340.8) 9,664.7 839.1

Cash flow from operations 5,045.6 (47,396.8) 93,181.3 113,745.9

Underlying valuation 12/14 12/15E 12/16E 12/17E

Capital expenditures (105.8) (421.4) (486.1) (528.6) Underlying profit (HK$ mn) 23,830.2 27,830.5 31,167.4 33,135.7

Acquisitions (4,611.7) (2,308.8) 0.0 0.0 Underlying EPS (HK$) 2.92 2.82 3.16 3.36


Others 2,310.1 (5,169.4) (4,057.6) (3,304.6) Underlying ROE (%) 19.6 16.7 14.7 14.0

Cash flow from investments (2,407.4) (7,899.6) (4,543.7) (3,833.3) Underlying ROA (%) 6.7 6.5 6.9 7.3

Underlying ROACE (%) 15.2 12.9 13.5 19.2

Dividends paid (common & pref) (4,005.2) (5,090.2) (6,233.5) (6,627.1) Underlying P/E (X) 7.2 8.3 7.4 7.0

Inc/(dec) in debt 21,819.2 7,666.5 (14,618.2) (40,000.0) Underlying dividend payout (%) 16.8 18.3 20.0 20.0

Common stock issuance (repurchase) 0.0 42,786.1 0.0 0.0 Underlying EPS growth (%) 25.7 (3.2) 12.0 6.3

Other financing cash flows (1,392.7) (4,351.2) (4,201.8) (3,027.5)


Total cash flow 19,059.5 (14,285.3) 63,584.1 60,258.0 Note: Last actual year may include reported and estimated data.


2015 年 10 月 5 日中国：开发商


Sunac: Risk overplayed, strong pipeline for growth; up to Buy

Source of opportunity We upgrade Sunac to Buy from Neutral. Its share price has been underperforming the sector since the February announcement of its planned acquisition of Kaisa (1638.HK, NC), which does not share Sunac’s product and geographic focus. After the Kaisa acquisition failed, the chairman announced a new acquisition of Yurun group. All these activities indicated

that Sunac wants to grow its scale as quickly as possible, even at the expense of deviating from its previous strategy of focusing on higher-end and higher-tier cities. Although such a shift will make Sunac’s future land bank mix no different from many of the names under our coverage and implies long-term managerial challenges, we believe (with Sunac trading at a 2015E-17E P/B of 0.6X vs. average 2015E-17E ROE of 20%), such challenges and

uncertainties are fully priced in. In the past, the company has demonstrated strong execution that led to fast asset turnover and below-average SG&A expenses (4% of contract sales vs. sector average of 6%), as well as its proven ability to grow scale through M&A with price being mostly favorable to Sunac.

We revise 2016E-17E underlying EPS by 1%/10% after factoring in: (1) a

3%/7% presales upgrade to Rmb72bn/75bn in 2016E-17E on the addition of eight projects; (2) reduced financing cost (average of 7.5% in 2015-17E vs. 9.1% in 2014) to reflect the cheaper funding it obtained onshore (so far Rmb5bn domestic corporate bond issued in Aug-15 with interest cost ranging from 4.48%-4.7% p.a.). After removing the “A-share valuation element” from the target price calculation for our offshore coverage, we lower our 12-month

NAV-based target price by 29% to HK$7.9 from HK$11.2 (based on an enlarged target price discount from 0% to 30%, which aligns the target-price-implied 2015-17E P/B-ROE discount to the sector trend line with the 2012-1H13 average level on the back of stable ROE quartile). Our target price implies 89% potential upside vs. the 56% average for our offshore coverage, and hence we upgrade to Buy from Neutral.

Catalyst 1. Strengthened project pipelines to yield better growth: We expect 6%

presales CAGR for Sunac vs. peers’ flattish average in 2015-17E and its attributable presales to grow at 6% on average to Rmb48bn/50bn in 2016-17E from largely flattish yoy in 2015E based on existing land bank.

2. Profitability to bottom out in 2H15 and onwards: We expect margins to

recover in 2H15 given 20% unadjusted GPM for consolidated unbooked sales of Rmb20.8bn as of 1H15 (vs. 11% reported in 1H15). In the long term, management aims to achieve a 25% GPM and 10% NM through lower financing costs and enhanced product competitiveness.

Valuation Sunac trades at the one of lowest valuation multiples among our offshore coverage (63% discount to end-2015E NAV, 3.3X/0.6X 2015E PE/PB vs. peer averages of 55%, 6.5X and 0.9X).

Key risks Slower-than-expected turnaround in profitability; misstep in expansion and thus lead to balance sheet deterioration.

Growth

Returns *

Multiple


Multiple

Returns *

Growth

Investment Profile

Low High





Sunac China Holdings (1918.HK)


Key data Current

Price (HK$) 4.18




12/14 12/15E 12/16E 12/17E

EPS (Rmb) 0.99 1.05 1.23 1.31

EPS growth (%) (5.4) 5.6 17.7 6.5

EPS (diluted) (Rmb) 0.95 0.85 1.05 1.13


P/E (X) 4.3 3.3 2.8 2.6

P/B (X) 0.9 0.6 0.5 0.5

EV/EBITDA (X) 7.3 7.5 10.3 6.0

Dividend yield (%) 4.6 5.0 6.1 6.6

ROE (%) 21.5 16.7 17.9 16.7

CROCI (%) 9.0 2.5 3.9 5.2

55

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70

75

80

85

90

95

3

4

5

6

7

8

9

10

11



Sunac China Holdings (L) MSCI China (R)

Share price performance (%) 3 month 6 month 12 monthAbsolute (54.6) (35.8) (31.1)

Rel. to MSCI China (38.3) (22.7) (23.3)


2015 年 10 月 5 日中国：开发商



Sunac China Holdings: Summary financials

Profit model (Rmb mn) 12/14 12/15E 12/16E 12/17E Balance sheet (Rmb mn) 12/14 12/15E 12/16E 12/17E



SG&A (1,378.0) (1,548.2) (1,808.9) (1,939.7) Inventory 49,383.0 55,314.9 48,175.5 35,791.5

R&D -- -- -- -- Other current assets 0.0 0.0 0.0 0.0

Other operating profit/(expense) 900.6 2,118.2 0.0 0.0 Total current assets 97,466.8 98,800.2 94,329.4 92,118.3

EBITDA 3,864.5 4,555.2 3,212.9 4,057.2 Net PP&E 61.8 71.7 81.8 91.3



Interest income 123.4 190.1 134.3 146.2 Other long-term assets 2,396.9 2,876.3 3,020.1 3,171.2

Interest expense (1,259.0) (1,270.0) (1,220.8) (1,139.5) Total assets 112,362.3 119,520.1 120,695.5 123,186.8

Income/(loss) from uncons. subs. 2,181.3 1,382.3 3,154.7 3,056.8

Others 16.3 26.5 30.3 33.8 Accounts payable 32,329.6 36,692.8 36,489.0 35,307.6



Minorities (10.6) (379.5) (342.5) (568.3) Total current liabilities 64,948.8 68,000.9 65,603.1 64,146.1

Long-term debt 20,544.1 23,687.2 23,687.2 23,687.2

Net income pre-preferred dividends 3,222.1 2,919.8 3,604.9 3,880.8 Other long-term liabilities 5,886.8 4,194.5 4,404.2 4,624.4


Net income (pre-exceptionals) 3,222.1 2,919.8 3,604.9 3,880.8 Total liabilities 91,379.7 95,882.6 93,694.5 92,457.6


Net income 3,222.1 2,919.8 3,604.9 3,880.8 Preferred shares 0.0 0.0 0.0 0.0


EPS (basic, pre-except) (Rmb) 0.96 0.86 1.05 1.13 Minority interest 4,629.7 5,009.2 5,351.7 5,920.1

EPS (basic, post-except) (Rmb) 0.96 0.86 1.05 1.13 Total liabilities & equity 112,362.3 119,520.1 120,695.5 123,186.8

EPS (diluted, post-except) (Rmb) 0.95 0.85 1.05 1.13 BVPS (Rmb) 4.83 5.42 6.30 7.22

DPS (Rmb) 0.19 0.17 0.21 0.23 RNAV (Rmb mn) -- 31,677.6 36,602.4 --

Dividend payout ratio (%) 20.0 20.0 20.0 20.0 RNAVPS (Rmb) -- 9.22 10.65 --

Free cash flow yield (%) 89.0 (17.0) 26.1 66.7


Sales growth (18.7) (4.6) 18.5 14.3 ROE (%) 21.5 16.7 17.9 16.7

EBITDA growth (37.1) 17.9 (29.5) 26.3 ROA (%) 3.1 2.5 3.0 3.2

EBIT growth (37.2) 17.9 (29.7) 26.4 ROACE (%) 11.7 10.3 10.3 11.7

Net income growth 1.4 (9.4) 23.5 7.7 Inventory days 946.3 958.5 810.0 580.5

EPS growth (0.1) (11.0) 22.5 7.7 Receivables days 316.6 429.7 381.0 346.6


EBITDA margin 15.4 19.0 11.3 12.5 Net debt/equity (%) 44.5 72.8 58.9 21.9

EBIT margin 15.3 18.9 11.2 12.4 Interest cover - EBIT (X) 3.4 4.2 2.9 4.1

Cash flow statement (Rmb mn) 12/14 12/15E 12/16E 12/17E Valuation 12/14 12/15E 12/16E 12/17E

Net income pre-preferred dividends 3,222.1 2,919.8 3,604.9 3,880.8 P/E basic (X) 4.3 3.2 2.7 2.5

D&A add-back 24.7 26.5 30.3 33.8 P/B (X) 0.9 0.6 0.5 0.5

Minorities interests add-back 10.6 379.5 342.5 568.3 EV/EBITDA (X) 7.3 7.4 10.2 5.9

Net (inc)/dec working capital 14,010.7 (2,993.6) 3,370.5 9,932.4 Dividend yield (%) 4.6 5.2 6.3 6.8

Other operating cash flow (550.7) (3,074.6) (2,944.9) (2,836.6)

Cash flow from operations 16,717.4 (2,742.3) 4,403.3 11,578.7


Capital expenditures (26.0) (36.4) (40.3) (43.3) Underlying profit (Rmb mn) 3,353.7 3,594.8 4,229.9 4,505.8

Acquisitions (579.2) 0.0 0.0 0.0 Underlying EPS (Rmb) 0.99 1.05 1.23 1.31


Others (8,279.7) (4,432.2) (2,481.5) (1,636.1) Underlying ROE (%) 22.4 20.6 21.0 19.4



Dividends paid (common & pref) (635.7) (644.4) (584.0) (721.0) Underlying P/E (X) 4.3 3.2 2.7 2.5

Inc/(dec) in debt 6,172.4 1,789.4 0.0 0.0 Underlying dividend payout (%) 19.4 16.4 17.0 17.2

Common stock issuance (repurchase) 125.8 0.0 0.0 0.0 Underlying EPS growth (%) (5.4) 5.6 17.7 6.5

Other financing cash flows (6,251.6) 0.0 0.0 0.0

Cash flow from financing (589.1) 1,144.9 (584.0) (721.0)



2015 年 10 月 5 日中国：开发商


SOL: Remove from CL but retain Buy on better asset churn outlook

What happened We remove Shui On Land from our Conviction List following its relative

outperformance vs. offshore peers. Since being added to our Conviction List on May 10, 2015, SOL is down 32% vs. MSCI China down 30% and our offshore coverage down 36%, as the sector was hit by concerns on renminbi depreciation. We lower our 12-month NAV-based target price by 20% to HK$3.2 after enlarging our target price discount to end-2015E NAV from 20% to 40%, which aligns the target-price-implied 2015-17E P/B against ROE

premium to the sector trend line with the 2012-1H13 average level on the back of similar ROE quartile. The target price NAV discount is 14pp narrower than the 54% average the shares traded at during 2012-1H13, and we believe this can be justified given increasing evidence that management is now more focused on asset churn (see Asset disposal of Shanghai XTD project crystallizes value; CL-Buy, July 24, 2015). However, as our new target

price implies less potential upside vs. some other names among our offshore coverage, we remove it from our Conviction List but maintain Buy.

Current view 1. Strong sales momentum in 2H2015 and onwards: We expect 86%

hoh/50% yoy rise of residential sales for SOL in 2H15 to Rmb5 bn (vs. peer averages of +37% hoh/+11% yoy) on two key new project launches in Shanghai (RHXL Lot 9 and Taipingqiao Lot 116), which will provide c.Rmb10

bn in saleable resources for 2H15. In the next five years, with a total of Rmb100 bn in saleable resources (60% in Shanghai) and Rmb65 bn in investment properties that could be potentially disposed of as well, management expects at least Rmb20 bn in sales p.a. over the next five years from the existing land bank vs. Rmb10.7 bn in 2012-2014.

2. Potential earnings upside from commercial en-bloc sales: Post the

disposal of Shanghai Xintiandi Corporate Avenue 1 & 2 office buildings in July 2015 at a total consideration of Rmb6.6 bn (bringing in Rmb5.1 bn core earnings and lowering net gearing by 16pp), management is currently negotiating with various potential buyers for the sale of nearby Corporate Avenue 3 at about Rmb5 bn. The ongoing asset sales will not only provide significant earnings uplift for SOL in the coming years, but also expedite its

deleveraging process (management looks to lower gearing to 50% by 2017 from c.80% at end-2015E).

Valuation We keep our 2015E-17E underlying EPS unchanged but lower our 12-month NAV-based target price by 20% to HK$3.2 (as we have removed the “A-share valuation element” from the target price calculation for our offshore coverage, which is now purely based on NAV discount). Our new target price implies an

average 2015-17E P/B of 0.8X vs. the average of 0.6X in 2012-1H13, given our view that SOL will not trade significantly below book value if it starts to monetize the land bank. SOL trades at a 67% discount to end-2015E NAV and 0.4X 2015E P/B (excluding revaluations) vs. the peer averages of 55%/0.9X.

Key risks Sales/margin misses; delay in commercial enbloc sales.

Growth

Returns *

Multiple


Multiple

Returns *

Growth

Investment Profile

Low High





Shui On land (0272.HK)


Key data Current

Price (HK$) 1.75




12/14 12/15E 12/16E 12/17E

EPS (Rmb) (0.01) 0.47 0.03 0.10

EPS growth (%) (109.2) 4,593.7 (94.6) 289.1

EPS (diluted) (Rmb) 0.22 0.21 0.03 0.10


P/E (X) NM 3.1 56.7 14.6

P/B (X) 0.3 0.3 0.3 0.3

EV/EBITDA (X) 9.2 11.3 21.4 15.5

Dividend yield (%) 3.1 3.4 3.4 3.4

ROE (%) 4.8 4.8 0.6 2.2

CROCI (%) 2.0 4.3 2.3 3.1

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75

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105

1.0

1.2

1.4

1.6

1.8

2.0

2.2

2.4

2.6

2.8

3.0



Shui On land (L) MSCI China (R)


Absolute (23.9) 1.7 (8.4)

Rel. to MSCI China 3.3 22.4 2.0


2015 年 10 月 5 日中国：开发商



Shui On land: Summary financials




SG&A (1,234.0) (1,212.2) (1,070.2) (1,106.6) Inventory 20,101.0 22,787.0 19,271.1 15,259.5

R&D -- -- -- -- Other current assets 0.0 0.0 0.0 0.0

Other operating profit/(expense) 2,992.0 3,438.0 0.0 0.0 Total current assets 39,740.0 39,468.0 38,155.3 38,088.2

EBITDA 5,365.0 4,497.5 2,184.5 2,850.7 Net PP&E 1,418.0 1,369.4 1,353.2 1,315.8




Interest expense (921.0) (1,012.2) (757.9) (741.9) Total assets 108,323.0 112,957.9 113,723.7 115,820.0




Income tax (1,933.0) (1,201.6) (730.9) (940.6) Other current liabilities 3,376.0 5,102.0 5,977.9 6,289.6

Minorities (172.0) 13.6 18.1 (1.3) Total current liabilities 20,387.0 18,622.8 19,775.3 20,610.4

Long-term debt 36,562.0 39,395.0 38,395.0 38,395.0

Net income pre-preferred dividends 2,313.0 2,484.5 903.6 1,554.4 Other long-term liabilities 6,452.0 7,097.2 7,806.9 8,587.6

Preferred dividends (535.0) (625.2) (678.4) (678.4) Total long-term liabilities 43,014.0 46,492.2 46,201.9 46,982.6

Net income (pre-exceptionals) 1,778.0 1,859.2 225.2 876.0 Total liabilities 63,401.0 65,115.0 65,977.2 67,593.0


Net income 1,778.0 1,859.2 225.2 876.0 Preferred shares 5,949.0 7,300.1 7,300.1 7,300.1






Dividend payout ratio (%) 22.2 21.2 175.0 45.0 RNAVPS (Rmb) -- 4.33 5.25 --



Sales growth 4.3 (24.4) 32.8 13.0 ROE (%) 4.8 4.8 0.6 2.2

EBITDA growth (0.1) (16.2) (51.4) 30.5 ROA (%) 1.7 1.7 0.2 0.8

EBIT growth 0.6 (14.8) (52.1) 31.4 ROACE (%) 2.9 2.7 0.7 1.4

Net income growth (16.3) 4.6 (87.9) 289.1 Inventory days 1,189.7 1,414.6 1,083.1 816.0

EPS growth (21.7) 4.6 (87.9) 289.1 Receivables days 374.9 570.7 399.6 376.9





Net income pre-preferred dividends 2,313.0 2,484.5 903.6 1,554.4 P/E basic (X) NM 3.1 57.5 14.8

D&A add-back 161.0 61.5 60.8 59.1 P/B (X) 0.3 0.3 0.3 0.3

Minorities interests add-back 172.0 (13.6) (18.1) 1.3 EV/EBITDA (X) 9.2 11.3 21.4 15.6

Net (inc)/dec working capital (8,022.0) (223.0) 5,646.1 3,377.1 Dividend yield (%) 3.1 3.4 3.4 3.4

Other operating cash flow (1,445.0) 663.2 676.7 638.7



Capital expenditures (168.0) (12.9) (44.7) (21.7) Underlying profit (Rmb mn) (85.0) 4,162.2 225.2 876.0

Acquisitions (2,044.0) 0.0 0.0 0.0 Underlying EPS (Rmb) (0.01) 0.47 0.03 0.10


Others (354.0) (4,973.6) (2,061.5) (2,058.8) Underlying ROE (%) (0.2) 10.8 0.6 2.2

Cash flow from investments (2,566.0) (4,986.5) (2,106.2) (2,080.5) Underlying ROA (%) (0.1) 3.8 0.2 0.8


Dividends paid (common & pref) (395.0) (929.0) (1,019.2) (1,072.4) Underlying P/E (X) (153.6) 3.1 57.5 14.8

Inc/(dec) in debt 12,567.0 333.0 (2,000.0) 0.0 Underlying dividend payout (%) (471.2) 10.5 193.8 49.8

Common stock issuance (repurchase) 0.0 0.0 0.0 0.0 Underlying EPS growth (%) (109.2) 4,593.7 (94.6) 289.1

Other financing cash flows (1,511.0) 1,379.1 37.3 (2.8)

Cash flow from financing 10,661.0 783.1 (2,981.9) (1,075.2)



2015 年 10 月 5 日中国：开发商


Poly (H): Execution turnaround yet to be seen; down to Neutral

What happened We downgrade Poly Property (H) to Neutral from Buy. As a reflection of the

company’s slow asset churn, the shares are still trading at a deeper NAV discount than our offshore coverage average level. However, we believe potential upside for the shares will be limited given that Poly (H)’s P/E valuation and P/B vs. ROE are at less attractive levels than our Buy-rated stocks. Without significantly improving its asset turnover, we estimate Poly (H)’s ROE will be the lowest in our coverage universe at 1% during 2015E-

17E vs. the average of 12.7% for peers.

Since we upgraded Poly (H) to Buy on January 19, 2015, the shares are down 39% vs. the MSCI index down 12% and our offshore coverage down 10%. We attribute the underperformance to Poly (H)’ s continued weak execution on asset turnover. We have also not seen any discipline in its cash flow management. The company is still buying new projects YTD, despite its

poor balance sheet and low return on existing land bank.

Current view 1. Upside risk on presales but lingering pressure on margins:

Management targets Rmb26 bn in presales for FY15 based on 30% sell-through in 2H vs. 40% in 1H. With six new project launches planned in 2H (three in tier-1 cities) vs. two in 1H and potential en-bloc sales of Shanghai Poly Greenland Plaza (c.Rmb4 bn if concluded), we see potentially upbeat

sales in FY15. However, we expect rising land costs, heavy debt and in turn financial expenses to continuously suppress the company’s profitability. We estimate a 0.9% underlying profit margin on average for shareholders during FY15-17E (vs. 0.7% in FY14).

2. Balance sheet to remain the weakest among our coverage. We now

believe it will take a longer time for us to see material operational

improvements, and thus we expect the gearing of the company will remain one of the highest among our coverage universe: We estimate average 105% net gearing in 2015-17E (treating PCS as debt) without factoring new project additions vs. 87% in 2012-1H13 and 58% for peers in 2015-17E (61% in 2012-1H13).

Valuation We keep 2015E-17E underlying EPS unchanged but lower our 12-month

NAV-based target price 57% to HK$2.9 after raising our target price discount to end-2015E NAV from 30% to 70%, which implies a wider discount to our sector P/B-ROE trend line compared with the last up-cycle (10% discount vs. 0%) given its deteriorating ROE and rising leverage, and slower-than-expected execution recovery.

The shares are trading at a 77% discount to end-2015E NAV, 61.3X 2015E P/E, 0.3X 2015E P/B against 1% average 2015E-17E ROE vs. our offshore coverage averages of 55%, 6.5X and 0.9X against average

ROE of 12.7% ROE, respectively.

Key risks Property sales/margin miss (-)/beat (+); faster-/slower-than-expected restructuring progress with Poly A.

Growth

Returns *

Multiple


Multiple

Returns *

Growth

Investment Profile

Low High





Poly Property Group (0119.HK)


Key data Current

Price (HK$) 2.20



Foreign ownership (%) 0.0

12/14 12/15E 12/16E 12/17E

EPS (HK$) 0.06 0.04 0.09 0.09

EPS growth (%) (89.5) (35.4) 145.9 (3.1)

EPS (diluted) (HK$) 0.25 0.14 0.09 0.09

EPS (basic pre-ex) (HK$) 0.25 0.14 0.09 0.09

P/E (X) 61.5 61.3 24.9 25.7

P/B (X) 0.4 0.3 0.3 0.3

EV/EBITDA (X) 13.4 15.3 17.1 15.9

Dividend yield (%) 2.2 0.6 0.4 0.4

ROE (%) 3.1 1.7 1.1 1.0

CROCI (%) (2.3) 2.4 (1.9) (2.7)

55

60

65

70

75

80

85

90

95

100

105

1.0

1.5

2.0

2.5

3.0

3.5

4.0

4.5

5.0

5.5

6.0



Poly Property Group (L) MSCI China (R)


Absolute (43.7) (39.4) (29.7)

Rel. to MSCI China (23.6) (27.1) (21.7)


2015 年 10 月 5 日中国：开发商



Poly Property Group: Summary financials

Profit model (HK$ mn) 12/14 12/15E 12/16E 12/17E Balance sheet (HK$ mn) 12/14 12/15E 12/16E 12/17E



SG&A (2,176.9) (2,143.7) (2,219.5) (2,184.5) Inventory 84,835.1 82,787.2 79,401.4 72,252.1

R&D -- -- -- -- Other current assets 2,507.5 2,906.0 2,930.3 2,930.8

Other operating profit/(expense) 446.0 408.6 140.7 140.8 Total current assets 114,888.5 110,821.4 107,643.7 103,755.6

EBITDA 3,915.8 3,100.0 2,765.1 2,788.8 Net PP&E 2,049.8 2,058.0 2,066.9 2,075.2




Interest expense (893.1) (1,109.5) (1,024.8) (1,024.8) Total assets 129,402.9 126,573.3 125,013.7 122,736.9






Long-term debt 32,940.7 34,217.1 34,217.1 34,217.1

Net income pre-preferred dividends 929.4 665.6 472.4 462.3 Other long-term liabilities 1,351.3 1,489.3 1,489.3 1,489.3

Preferred dividends 0.0 (149.3) (149.3) (149.3) Total long-term liabilities 34,292.0 35,706.3 35,706.3 35,706.3

Net income (pre-exceptionals) 929.4 516.3 323.1 313.0 Total liabilities 95,303.7 91,448.6 89,587.7 86,985.7


Net income 929.4 516.3 323.1 313.0 Preferred shares 998.7 1,340.5 1,340.5 1,340.5


EPS (basic, pre-except) (HK$) 0.25 0.14 0.09 0.09 Minority interest 3,338.2 3,782.6 3,812.5 3,857.0

EPS (basic, post-except) (HK$) 0.25 0.14 0.09 0.09 Total liabilities & equity 129,402.9 126,573.3 125,013.7 122,736.9

EPS (diluted, post-except) (HK$) 0.25 0.14 0.09 0.09 BVPS (HK$) 8.13 8.19 8.27 8.34

DPS (HK$) 0.08 0.01 0.01 0.01 RNAV (HK$ mn) -- 34,915.5 36,236.4 --

Dividend payout ratio (%) 29.8 10.0 10.0 10.0 RNAVPS (HK$) -- 9.54 9.90 --



Sales growth (0.4) (2.1) 0.8 0.0 ROE (%) 3.1 1.7 1.1 1.0

EBITDA growth (18.6) (20.8) (10.8) 0.9 ROA (%) 0.8 0.4 0.3 0.3

EBIT growth (19.3) (21.2) (11.3) 0.9 ROACE (%) 2.5 1.7 1.4 1.4

Net income growth (65.8) (44.5) (37.4) (3.1) Inventory days 1,268.3 1,325.6 1,270.2 1,186.9

EPS growth (65.8) (44.5) (37.4) (3.1) Receivables days 114.4 158.9 169.3 170.0




Cash flow statement (HK$ mn) 12/14 12/15E 12/16E 12/17E Valuation 12/14 12/15E 12/16E 12/17E

Net income pre-preferred dividends 929.4 665.6 472.4 462.3 P/E basic (X) 61.5 59.4 24.1 24.9

D&A add-back 154.2 134.7 135.3 135.8 P/B (X) 0.4 0.3 0.3 0.3


Net (inc)/dec working capital (3,169.6) 558.1 3,461.8 7,160.5 Dividend yield (%) 2.2 0.7 0.4 0.4

Other operating cash flow (3,301.7) 285.4 (2,678.0) (3,218.8)



Capital expenditures (146.0) (142.9) (144.1) (144.2) Underlying profit (HK$ mn) 203.0 131.4 323.1 313.0

Acquisitions 0.0 0.0 0.0 0.0 Underlying EPS (HK$) 0.06 0.04 0.09 0.09


Others (4,939.3) (1,041.3) (1,305.2) (1,301.6) Underlying ROE (%) 0.7 0.4 1.1 1.0




Inc/(dec) in debt 11,571.2 (4,953.2) 0.0 0.0 Underlying dividend payout (%) 136.5 39.3 10.0 10.0

Common stock issuance (repurchase) 0.0 0.0 0.0 0.0 Underlying EPS growth (%) (89.5) (35.4) 145.9 (3.1)

Other financing cash flows 749.6 367.6 26.9 27.9

Cash flow from financing 11,510.5 (4,862.7) (174.0) (153.8)

Total cash flow 1,410.9 (4,109.1) 75.1 3,258.2 Note: Last actual year may include reported and estimated data.


2015 年 10 月 5 日中国：开发商


Yanlord: Valuation relatively less attractive now, down to Neutral

What happened We downgrade Yanlord to Neutral from Buy following the shares’ relative

outperformance. Since being added to our Buy List on May 10, 2015, Yanlord is up 12% vs. MSCI China down 30% and our offshore coverage down 36%. After removing the “A-share valuation element” from our valuation approach for our offshore coverage, we enlarge our target price discount to NAV by 10pp from 30% to 40%, which is in line with the last recovery cycle (2012-1H13) average NAV discount, and we also align our target price implied

average 2015-17E P/B vs. ROE premium to the sector trend line with 2012-1H13 average level given its stable ROE quartile. As a result, we lower our 12-month NAV-based target price by 12% to S$1.5, suggesting lower coverage-relative upside potential and thus downgrade to Neutral.

Current view 1. As the key beneficiary of the strong Shanghai and Nanjing property

markets (which contribute almost 60% of its sales this year), Yanlord

achieved 188% yoy growth of presales in 8M15 (vs. peers average of 18%), and we expect its FY15 presales to be 11% higher than the management target (Rmb20 bn vs. Rmb18 bn) and thus deliver better-than-peers yoy growth of 56% (vs. peers average of 12%) for FY15. However, after the two new launches in 3Q2015, we expect Yanlord’s strong sales performance to take a break for the rest of this year and decline 44% yoy from the high base

last year. The high-end project Shanghai On the Park (Rmb2.1 bn saleable resources potentially to be launched at end-2015E) will be the key swing factor to drive upside risk for our current presales estimate. That said, if this project contributed significant sales in 2015, it will mean lower sales growth for next year given Yanlord’s relatively thin project pipeline on very slow new land acquisition since 2012.

2. We expect a sharp decline of the company’s gross profit margin in 2H15,

down 10pp hoh to 27% from 37% in 1H15 given lower margin from phase one booking in Shenzhen, Shanghai Western Garden and Tianjin Academic Park. Overall, we estimate around 30%-31% GPM for 2015-2017, slightly improved from 29% in FY14. That said, Yanlord’s 2015E-17E ROE will be still in the 4th quartile among our offshore coverage (average of 6.3% in 2015-2017E vs. its

cost of capital of 6.5% at 1H15).

Valuation Yanlord trades at a 57% discount to end-2015E NAV, and a 2015E P/E of 12X and a 2015E P/B of 0.6X vs. the offshore coverage averages of 55%/6.5X/0.9X. We view its valuation risk/reward as fair.

Key risks Unexpected strong sales performance/policy easing in high-end market (+); margin miss and macro hard landing (-).

Growth

Returns *

Multiple


Multiple

Returns *

Growth

Investment Profile

Low High





Yanlord Land (YNLG.SI)


Key data Current

Price (S$) 1.05

12 month price target (S$) 1.50

Market cap (S$ mn / US$ mn) 2,031.0 / 1,425.1


12/14 12/15E 12/16E 12/17E

EPS (Rmb) 0.34 0.41 0.52 0.62

EPS growth (%) (37.5) 20.9 28.3 18.1

EPS (diluted) (Rmb) 0.69 0.41 0.52 0.62


P/E (X) 16.4 11.5 9.0 7.6

P/B (X) 0.6 0.5 0.4 0.4

EV/EBITDA (X) 9.1 11.2 7.2 4.2

Dividend yield (%) 1.1 1.4 1.7 2.0

ROE (%) 7.3 4.1 5.0 5.7

CROCI (%) (5.7) 7.0 7.7 13.7

2,800

2,900

3,000

3,100

3,200

3,300

3,400

3,500

3,600

0.90

0.95

1.00

1.05

1.10

1.15

1.20

1.25

1.30



Yanlord Land (L) FTSE Straits Times Index (R)

Share price performance (%) 3 month 6 month 12 monthAbsolute (8.7) 10.0 (5.0)

Rel. to FTSE Straits Times Index 7.5 31.9 9.9


2015 年 10 月 5 日中国：开发商



Yanlord Land: Summary financials



Cost of goods sold (8,302.2) (9,242.4) (9,524.9) (9,532.4) Accounts receivable 622.7 697.5 734.4 738.5

SG&A (716.4) (997.2) (920.6) (757.6) Inventory 37,382.7 42,594.3 41,020.0 34,627.0

R&D -- -- -- -- Other current assets 881.6 969.8 1,066.7 1,173.4

Other operating profit/(expense) 1,014.5 (96.0) (101.1) (101.6) Total current assets 45,477.0 54,046.3 60,087.3 62,812.2

EBITDA 3,729.2 2,847.2 3,343.7 3,588.9 Net PP&E 1,065.1 1,561.9 2,074.1 2,576.6


EBIT 3,698.6 2,807.5 3,291.0 3,523.4 Total investments 695.4 718.2 841.2 984.6


Interest expense (236.6) (240.6) (246.3) (234.8) Total assets 67,326.6 75,702.5 82,552.0 85,922.8

Income/(loss) from uncons. subs. 93.5 22.8 123.0 143.5

Others (39.0) 0.0 0.0 0.0 Accounts payable 13,284.5 18,774.4 24,830.8 27,234.0




Long-term debt 17,724.8 19,724.8 18,724.8 17,724.8

Net income pre-preferred dividends 1,359.4 797.3 1,022.6 1,207.8 Other long-term liabilities 1,668.1 1,668.1 1,668.1 1,668.1


Net income (pre-exceptionals) 1,359.4 797.3 1,022.6 1,207.8 Total liabilities 37,953.4 45,133.3 50,342.6 51,837.5


Net income 1,359.4 797.3 1,022.6 1,207.8 Preferred shares 0.0 0.0 0.0 0.0






Dividend payout ratio (%) 9.0 15.5 15.5 15.5 RNAVPS (Rmb) -- 11.42 10.73 0.00



Sales growth 4.0 12.0 5.3 0.6 ROE (%) 7.3 4.1 5.0 5.7

EBITDA growth (5.6) (23.7) 17.4 7.3 ROA (%) 2.1 1.1 1.3 1.4

EBIT growth (5.5) (24.1) 17.2 7.1 ROACE (%) 5.6 3.3 4.7 6.4

Net income growth (7.8) (41.4) 28.3 18.1 Inventory days 1,547.3 1,579.2 1,602.1 1,448.3

EPS growth (7.8) (41.4) 28.3 18.1 Receivables days 16.7 18.3 18.9 19.3


EBITDA margin 31.8 21.7 24.2 25.8 Net debt/equity (%) 45.0 39.3 11.0 (19.0)



Net income pre-preferred dividends 1,359.4 797.3 1,022.6 1,207.8 P/E basic (X) 16.4 11.3 8.8 7.4

D&A add-back 30.7 39.7 52.7 65.5 P/B (X) 0.6 0.4 0.4 0.4


Net (inc)/dec working capital (192.5) 203.4 7,593.9 8,792.1 Dividend yield (%) 1.1 1.4 1.8 2.1

Other operating cash flow (3,546.9) 292.1 (240.4) (158.4)



Capital expenditures (479.0) (536.5) (564.9) (568.1) Underlying profit (Rmb mn) 659.4 797.3 1,022.6 1,207.8

Acquisitions 0.0 0.0 0.0 0.0 Underlying EPS (Rmb) 0.34 0.41 0.52 0.62


Others (1.2) 0.0 0.0 0.0 Underlying ROE (%) 3.6 4.1 5.0 5.7

Cash flow from investments (480.2) (536.5) (564.9) (568.1) Underlying ROA (%) 1.0 1.1 1.3 1.4



Inc/(dec) in debt 2,422.5 2,000.0 (1,000.0) (1,000.0) Underlying dividend payout (%) 18.7 15.6 15.6 15.6

Common stock issuance (repurchase) 0.0 0.0 0.0 0.0 Underlying EPS growth (%) (37.5) 20.9 28.3 18.1

Other financing cash flows (123.7) 35.6 52.8 58.2


Total cash flow (492.0) 3,194.6 7,481.5 9,007.1 Note: Last actual year may include reported and estimated data.


2015 年 10 月 5 日中国：开发商


Company appendix

Company appendix

2015 年 10 月 5 日中国：开发商


Company appendix

In the company appendix section, we summarize six key charts for each company to cover analysis of their cash flow situation in 2016E, financial impact from an additional 10% renminbi depreciation against the US dollar, attributable land bank balance and its cost, comparison of land bank mark-to-market value and land bank original acquisition cost vs. EV, underlying profit growth and net margin of consolidated revenue, historical P/B valuation vs. current level against its ROE

and leverage trend.

Several notes for the charts:

1) Funding gap analysis: End-period cash balance before financing for 2015E refers to end-cash balance.

2) Impact from financials from 10% renminbi depreciation: Book value is calculated by excluding cumulative historical revaluation gain; we treat perpetual capital securities as

debt in our net gearing calculation.

3) Land bank cost and estimated mark-to-market value against EV: Calculation of land bank value and cost is on a total basis. But for EV calculation, we did not include JV debt. Therefore, EV for Sunac, Greentown, KWG, CML, Shimao, Gemdale, Vanke and Poly A is relatively more meaningfully underestimated given higher profit contribution from JVs than the rest of our coverage.

4) Underlying profit and gross debt yoy growth, consolidated net margin: Gross debt does not include JV debt. Consolidated net margin is calculated by using underlying profit as a starting point, adding back minorities and stripping out JV and associate income. Except KWG and Sunac for which we use attributable net margin (attributable underlying profit/attributable revenue booking) given significant profit contribution from JVs for these two companies.

5) 12-month rolling P/B vs. capitalization rate, ROE: capitalization rate is calculated by using common equity/total assets, excluding historical cumulative revaluation gain on both numbers; ROE is calculated by using underlying profit divided by average common equity (excl. revaluation gain) of current year and prior year.

6) We did not include SOHO, RSM and CFLD for this six-chart analysis given their different business focuses from other names that are mainly driven by property development

business.

2015 年 10 月 5 日中国：开发商


Agile (CL-Buy): Improving ROE & B/S justify higher valuation

图表 29. We est. its financial position to improve in 2016 even assume construction capex to grow 3% yoyFunding gap analysis

图表 30. Impact from Rmb depreciation is limited

Impact from financials on 10% Rmb depreciation



Exhibit 1: Land bank is falling with stable land cost Attri. Land bank and avg. land bank cost

Exhibit 2: EV implies no value of other assets except original land cost Land bank cost & est. mark-to-market value against EV



Exhibit 3: Recovering margin and falling debt Underlying profit & gross debt yoy growth, consolidated net margin

Exhibit 4: Attractive valuation on ROE/balance sheet improvement 12-month rolling P/B vs. capitalization rate, ROE



-10

0

10

20

30

40

50

60

15E 16E 15E 16E 15E 16E 16E

Others

Div.

Int. exp

Tax

Cons

Land

Cash from

presales

Rental

income


financing


total debt)

31%

Other debt

Bond

(Rmb bn)

50%4%

-6%-5%

-7%

-6%

-5%

-4%

-3%

-2%

-1%

0%0%

10%

20%

30%

40%

50%

60%




0

200

400

600

800

1,000

1,200

1,400

1,600

1,800

2,000

0

5

10

15

20

25

30

35

40

2008 2009 2010 2011 2012 2013 2014 2015YTD

Attributable landbank (LHS) Unsold landbank cost (RHS)(mn sqm) (Rmb/sqm)

0

10

20

30

40

50

60

70

80

90

Landbank value

-by market

Landbank value

-by cost

EV

Minority

MV (Latest

price)

Net debt

(treat PCS

as debt)

(Rmb bn)

-40%

-20%

0%

20%

40%

60%

80%

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

4.5

5.0

2009 2010 2011 2012 2013 2014 2015E 2016E 2017E

Underlying profit (LHS) Consolidated NM (RHS)

Gross debt yoy% (RHS)(Rmb bn)

0%

5%

10%

15%

20%

25%

30%

35%

0.0

0.2

0.4

0.6

0.8

1.0

1.2

1.4

1.6

1.8

2.0

2010 2011 2012 2013 2014 2015E 2016E 2017E

Trading P/B (LHS) ROE (RHS) Capitalization rate (RHS)(X)

2015 年 10 月 5 日中国：开发商


Shimao (CL-Buy): better growth outlook support mean reversion

图表 31. Strong cash flow position in 2016E Funding gap analysis

Exhibit 5: Moderate impact from Rmb depreciation Impact from financials on 10% Rmb depreciation



Exhibit 6: Smaller land bank but rising cost Attri. Land bank and avg. land bank cost

Exhibit 7: Valuation priced in substantial price fall of its land bank Land bank cost & est. mark-to-market value against EV



Exhibit 8: Weaker margin but solid volume growth Underlying profit & gross debt yoy growth, consolidated net margin

Exhibit 9: ROE to weaken but above sector average (13% for 2015E-2017E) 12-month rolling P/B vs. capitalization rate, ROE



-10

0

10

20

30

40

50

60

70

80

15E 16E 15E 16E 15E 16E 16E

Others

Div.

Int. exp

Tax

Cons

Land

Cash from

presales

Rental

income


financing


total debt)

18%

Other debt

Bond

(Rmb bn)

45%

0%

-4%

-6%

-7%

-6%

-5%

-4%

-3%

-2%

-1%

0%0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%




0

500

1,000

1,500

2,000

2,500

3,000

0

5

10

15

20

25

30

35

40

45

2008 2009 2010 2011 2012 2013 2014 2015YTD


0

20

40

60

80

100

120

140

160

180

200

Landbank value

-by market

Landbank value

-by cost

EV

Minority

MV (Latest

price)

Net debt

(treat PCS

as debt)

(Rmb bn)

-20%

-10%

0%

10%

20%

30%

40%

50%

60%

70%

80%

0.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

8.0

9.0

10.0

2009 2010 2011 2012 2013 2014 2015E 2016E 2017E



0%

5%

10%

15%

20%

25%

30%

0.0

0.2

0.4

0.6

0.8

1.0

1.2

1.4

1.6

1.8

2010 2011 2012 2013 2014 2015E 2016E 2017E


2015 年 10 月 5 日中国：开发商


Vanke A (CL-Buy): Top ROE quartile justify higher valuation

图表 32. Strong cash flow position to support pipeline growth Funding gap analysis

Exhibit 10: Minor Rmb depreciation impact Impact from financials on 10% Rmb depreciation



Exhibit 11: Falling land bank but rising land cost Attri. Land bank and avg. land bank cost

Exhibit 12: Valuation assumed land price fall or heavy debt on JV level Land bank cost & est. mark-to-market value against EV



Exhibit 13: Strong growth driven by stable margin and solid balance sheet Underlying profit & gross debt yoy growth, cons. NM

Exhibit 14: Light asset model the key to support ROE resilience 12-month rolling P/B vs. capitalization rate, ROE



-50

0

50

100

150

200

250

300

15E 16E 15E 16E 15E 16E 16E

Others

Div.

Int. exp

Tax

Cons

Land

Cash from

presales

Rental

income


financing


total debt)

16%

Other debt

Bond

(Rmb bn)

19%

0%

-1%-1%

-1.5%

-0.5%

0.5%

1.5%

2.5%

3.5%-70%

-60%

-50%

-40%

-30%

-20%

-10%

0%

10%

20%

30%

FX debt

exposure

Net gearing Underlying profit Book value



0

500

1,000

1,500

2,000

2,500

3,000

3,500

0

10

20

30

40

50

60

70

80

2008 2009 2010 2011 2012 2013 2014 2015YTD


0

50

100

150

200

250

300

350

400

450

Landbank value

-by market

Landbank value

-by cost

EV

Minority

MV (Latest

price)

Net debt

(treat PCS

as debt)

(Rmb bn)

-20%

-10%

0%

10%

20%

30%

40%

50%

60%

0.0

5.0

10.0

15.0

20.0

25.0

30.0

2009 2010 2011 2012 2013 2014 2015E 2016E 2017E

Underlying profit (LHS)

Consolidated NM (RHS)(Rmb bn)

0%

5%

10%

15%

20%

25%

0.0

0.5

1.0

1.5

2.0

2.5

2010 2011 2012 2013 2014 2015E 2016E 2017E


2015 年 10 月 5 日中国：开发商


COLI (Buy): solid fundamental outlook justify a premium valuation

Exhibit 15: Strong balance sheet to fuel growth in later years Funding gap analysis

Exhibit 16: Higher impact mainly due to translation loss Impact from financials on 10% Rmb depreciation



Exhibit 17: Land banking already slowed even factoring parent asset injection Attri. Land bank and avg. land bank cost

Exhibit 18: COLI’s relative valuation is higher but also didn’t factor in much growth prospect Land bank cost & est. mark-to-market value against EV



Exhibit 19: Stable margin, slower profit growth in 17E mainly because we assumed no new acquisition Underlying profit & gross debt yoy growth, consolidated net margin

Exhibit 20: Relative high valuation in the sector but at historical low 12-month rolling P/B vs. capitalization rate, ROE



0

20

40

60

80

100

120

140

160

180

15E 16E 15E 16E 15E 16E 16E

Others

Div.

Int. exp

Tax

Cons

Land

Cash from

presales

Rental

income


financing


total debt)

34%

Other debt

Bond

(Rmb bn)

81%

0%

-12%-14%

-14%

-12%

-10%

-8%

-6%

-4%

-2%

0%

2%-20%

-10%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%




0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

0

10

20

30

40

50

60

2008 2009 2010 2011 2012 2013 2014 2015YTD


0

50

100

150

200

250

Landbank value

-by market

Landbank value

-by cost

EV

Minority

MV (Latest

price)

Net debt

(treat PCS

as debt)

(Rmb bn)

-50%

-40%

-30%

-20%

-10%

0%

10%

20%

30%

40%

50%

0.0

5.0

10.0

15.0

20.0

25.0

30.0

2009 2010 2011 2012 2013 2014 2015E 2016E 2017E



0%

10%

20%

30%

40%

50%

60%

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

2010 2011 2012 2013 2014 2015E 2016E 2017E


2015 年 10 月 5 日中国：开发商


Country Garden (Buy): Managing capex the key for re-rating

Exhibit 21: Construction capex control still the key to maintain a solid balance sheet Funding gap analysis




Exhibit 23: Land bank still growing, same for land cost from a very low base Attri. Land bank and avg. land bank cost

Exhibit 24: Valuation priced in potential price fall of its land bank Land bank cost & est. mark-to-market value against EV



Exhibit 25: Margin will stabilized at relatively low level, growth more driven by volume Underlying profit & gross debt yoy growth, consolidated net margin

Exhibit 26: Record low valuation unjustified on solid outlook 12-month rolling P/B vs. capitalization rate, ROE



-20

0

20

40

60

80

100

120

140

160

15E 16E 15E 16E 15E 16E 16E

Others

Div.

Int. exp

Tax

Cons

Land

Cash from

presales

Rental

income


financing


total debt)

21%

Other debt

Bond

(Rmb bn)

47%

0%

-3%

-4%

-5.0%

-4.5%

-4.0%

-3.5%

-3.0%

-2.5%

-2.0%

-1.5%

-1.0%

-0.5%

0.0%0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%




0

100

200

300

400

500

600

700

800

0

10

20

30

40

50

60

70

80

90

2008 2009 2010 2011 2012 2013 2014 2015YTD


0

20

40

60

80

100

120

140

160

Landbank value

-by market

Landbank value

-by cost

EV

Minority

MV (Latest

price)

Net debt

(treat PCS

as debt)

(Rmb bn)

-10%

0%

10%

20%

30%

40%

50%

60%

0.0

2.0

4.0

6.0

8.0

10.0

12.0

14.0

2009 2010 2011 2012 2013 2014 2015E 2016E 2017E



0%

5%

10%

15%

20%

25%

30%

35%

0.0

0.2

0.4

0.6

0.8

1.0

1.2

1.4

1.6

1.8

2010 2011 2012 2013 2014 2015E 2016E 2017E


2015 年 10 月 5 日中国：开发商


Wanda (Buy): ROE to further improve on light asset model

图表 33. Solid cash flow position Funding gap analysis

Exhibit 27: Minor impact from Rmb depreciation Impact from financials on 10% Rmb depreciation



Exhibit 28: Flattish land bank balance and cost Attri. Land bank and avg. land bank cost

Exhibit 29: Valuation price in limited growth prospect Land bank cost & est. mark-to-market value against EV



Exhibit 30: Margin to rise on higher rental contribution Underlying profit & gross debt yoy growth, cons. net margin

Exhibit 31: More stable ROE and improve balance sheet justify valuation recovery 12-month rolling P/B vs. capitalization rate, ROE


Source: Company data Datastream Gao Hua Securities Research

-50

0

50

100

150

200

15E 16E 15E 16E 15E 16E 16E

Others

Div.

Int. exp

Tax

Cons

Land

Cash from

presales

Rental

income


financing


total debt)

28%

Other debt

Bond

(Rmb bn)

9%

1%

-1%

-1%

-2.0%

-1.5%

-1.0%

-0.5%

0.0%0%

10%

20%

30%

40%

50%

60%




0

200

400

600

800

1,000

1,200

1,400

0

10

20

30

40

50

60

70

80

90

2014 2015YTD


0

50

100

150

200

250

300

350

Landbank value

-by market

Landbank value

-by cost

EV

Minority

MV (Latest

price)

Net debt

(treat PCS

as debt)

(Rmb bn)

-10%

0%

10%

20%

30%

40%

50%

0.0

5.0

10.0

15.0

20.0

25.0

30.0

2012 2013 2014 2015E 2016E 2017E



0%

5%

10%

15%

20%

25%

30%

0.0

0.2

0.4

0.6

0.8

1.0

1.2

1.4

1.6

1.8

2014 2015E 2016E 2017E


2015 年 10 月 5 日中国：开发商


KWG (Buy): Solid fundamentals to drive valuation recovery

图表 34. Stable financial position Funding gap analysis




Exhibit 33: Land bank growth is slowing with stable cost Attri. Land bank and avg. land bank cost

Exhibit 34: Valuation assumed land price fall or heavy debt on JV level Land bank cost & est. mark-to-market value against EV



Exhibit 35: Prudent operation bode well for a balance between growth and profitability Underlying profit & gross debt yoy growth, cons. NM

Exhibit 36: Lower valuation unjustified given its relatively stable return profile 12-month rolling P/B vs. capitalization rate, ROE



0

5

10

15

20

25

15E 16E 15E 16E 15E 16E 16E

Others

Div.

Int. exp

Tax

Cons

Land

Cash from

presales

Rental

income


financing


total debt)

20%

Other debt

Bond

(Rmb bn)

49%

3%

-4%

-6%

-6%

-5%

-4%

-3%

-2%

-1%

0%0%

10%

20%

30%

40%

50%

60%




0

500

1,000

1,500

2,000

2,500

3,000

3,500

0

2

4

6

8

10

12

2008 2009 2010 2011 2012 2013 2014 2015YTD


0

5

10

15

20

25

30

35

40

45

Landbank value

-by market

Landbank value

-by cost

EV

Minority

MV (Latest

price)

Net debt

(treat PCS

as debt)

(Rmb bn)

-10%

0%

10%

20%

30%

40%

50%

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

2009 2010 2011 2012 2013 2014 2015E 2016E 2017E



0%

5%

10%

15%

20%

25%

30%

0.0

0.2

0.4

0.6

0.8

1.0

1.2

1.4

1.6

2010 2011 2012 2013 2014 2015E 2016E 2017E


2015 年 10 月 5 日中国：开发商


SOL (Buy): Better asset churn outlook support valuation recovery

图表 35. The ongoing asset sales will expedite its deleveraging process Funding gap analysis

Exhibit 37: Higher impact from Rmb depreciation due to heavy indebtedness and small earnings base Impact from financials on 10% Rmb depreciation



Exhibit 38: Depleting existing land bank to unlock value is the key focus Attri. Land bank and avg. land bank cost

Exhibit 39: EV discounted land bank value on its slow asset churn Land bank cost & est. mark-to-market value against EV



Exhibit 40: Financing cost saving on deleveraging will help restore margins Underlying profit & gross debt yoy growth, cons. NM

Exhibit 41: A faster asset turnover and potential commercial en-bloc sales key to lift ROE 12-month rolling P/B vs. capitalization rate, ROE



-10

-5

0

5

10

15

20

25

15E 16E 15E 16E 15E 16E 16E

Others

Div.

Int. exp

Tax

Cons

Land

Cash from

presales

Rental

income


financing


total debt)

29%

Other debt

Bond

(Rmb bn)

55%

8%

-113%

-10%

-120%

-100%

-80%

-60%

-40%

-20%

0%0%

20%

40%

60%

80%

100%

120%

FX debt

exposure




0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

0

2

4

6

8

10

12

2008 2009 2010 2011 2012 2013 2014 2015YTD


0

10

20

30

40

50

60

70

80

90

Landbank value

-by market

Landbank value

-by cost

EV

Minority

MV (Latest

price)

Net debt

(treat PCS

as debt)

(Rmb bn)

-10%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

4.5

2009 2010 2011 2012 2013 2014 2015E 2016E 2017E



-5%

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

0.0

0.1

0.2

0.3

0.4

0.5

0.6

0.7

0.8

0.9

2010 2011 2012 2013 2014 2015E 2016E 2017E


2015 年 10 月 5 日中国：开发商


Sunac (Buy): Fast asset turnover to ensure leading ROE profile

Exhibit 42: Financial discipline key to maintain balance sheet healthy Funding gap analysis




Exhibit 44: An enlarged portfolio is necessary to sustain growth momentum in the longer run Attri. Land bank and avg. land bank cost

Exhibit 45: Valuation implies land price fall for its most concentrated land bank in high tier cities & JV debt Land bank cost & est. mark-to-market value against EV



Exhibit 46: Profitability to bottom out in 2H15 and onwards Underlying profit & gross debt yoy growth, cons. NM

Exhibit 47: An deeper valuation discount to pees fully priced in risk associated with expansion 12-month rolling P/B vs. capitalization rate, ROE



0

5

10

15

20

25

30

35

15E 16E 15E 16E 15E 16E 16E

Others

Div.

Int. exp

Tax

Cons

Land

Cash from

presales

Rental

income


financing


total debt)

20%

Other debt

Bond

(Rmb bn)

30%

3%

-3%

-5%

-6%

-5%

-4%

-3%

-2%

-1%

0%0%

10%

20%

30%

40%

50%

60%

70%




0

1,000

2,000

3,000

4,000

5,000

6,000

0

2

4

6

8

10

12

14

16

2010 2011 2012 2013 2014 2015YTD


0

20

40

60

80

100

120

Landbank value

-by market

Landbank value

-by cost

EV

Minority

MV (Latest

price)

Net debt

(treat PCS

as debt)

(Rmb bn)

-20%

0%

20%

40%

60%

80%

100%

120%

140%

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

4.5

5.0

2009 2010 2011 2012 2013 2014 2015E 2016E 2017E



0%

10%

20%

30%

40%

50%

60%

0.0

0.2

0.4

0.6

0.8

1.0

1.2

1.4

1.6

1.8

2010 2011 2012 2013 2014 2015E 2016E 2017E


2015 年 10 月 5 日中国：开发商


Poly A (Buy): Lower ROE on deleveraging

图表 36. Balance sheet to improve substantially in 2016Funding gap analysis




Exhibit 49: De-stocking the key focus in 1H15 Attri. Land bank and avg. land bank cost

Exhibit 50: Valuation implies land price fall and heavy debt on JV level Land bank cost & est. mark-to-market value against EV



Exhibit 51: Solid growth on stabilizing margin Underlying profit & gross debt yoy growth, cons. NM

Exhibit 52: Lower ROE through deleveraging process 12-month rolling P/B vs. capitalization rate, ROE



0

20

40

60

80

100

120

140

160

180

15E 16E 15E 16E 15E 16E 16E

Others

Div.

Int. exp

Tax

Cons

Land

Cash from

presales

Rental

income


financing


total debt)

14%Other debt

Bond

(Rmb bn)

9%

2%

-1%

-1%

-2.0%

-1.5%

-1.0%

-0.5%

0.0%0%

10%

20%

30%

40%

50%

60%

70%




2,200

2,300

2,400

2,500

2,600

2,700

2,800

2,900

3,000

0

10

20

30

40

50

60

70

80

90

100

2008 2009 2010 2011 2012 2013 2014 2015YTD


0

50

100

150

200

250

300

350

400

Landbank value

-by market

Landbank value

-by cost

EV

Minority

MV (Latest

price)

Net debt

(treat PCS

as debt)

(Rmb bn)

-20%

0%

20%

40%

60%

80%

100%

120%

0.0

2.0

4.0

6.0

8.0

10.0

12.0

14.0

16.0

18.0

2009 2010 2011 2012 2013 2014 2015E 2016E 2017E



0%

5%

10%

15%

20%

25%

0.0

0.5

1.0

1.5

2.0

2.5

2010 2011 2012 2013 2014 2015E 2016E 2017E


2015 年 10 月 5 日中国：开发商


OCT (Buy): Valuation recovery of tourism business offers upside

图表 37. Stable financial positions Funding gap analysis




Exhibit 54: High exposure to Shenzhen & Shanghai at attractive cost Attri. Land bank and avg. land bank cost

Exhibit 55: Valuation doesn’t fully appreciate the heating land prices in its core markets Land bank cost & est. mark-to-market value against EV



Exhibit 56: Margin to sustain at sector high level benefiting from low cost land bank Underlying profit & gross debt yoy growth, cons. NM

Exhibit 57: New strategy to yield better return from tourism business may drive ROE upside in the LT 12-month rolling P/B vs. capitalization rate, ROE



0

5

10

15

20

25

30

35

15E 16E 15E 16E 15E 16E 16E

Others

Div.

Int. exp

Tax

Cons

Land

Cash from

presales

Rental

income


financing


total debt)

21%

Other debt

Bond

(Rmb bn)

0%

0%0% 0% 0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

70.0%

80.0%

90.0%

100.0%0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

FX debt

exposure




0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

4,500

0

1

2

3

4

5

6

7

8

9

10

2009 2010 2011 2012 2013 2014 2015YTD


0

10

20

30

40

50

60

70

Landbank value

-by market

Landbank value

-by cost

EV

Minority

MV (Latest

price)

Net debt

(treat PCS

as debt)

(Rmb bn)

-50%

0%

50%

100%

150%

200%

0.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

8.0

2009 2010 2011 2012 2013 2014 2015E 2016E 2017E



0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

2010 2011 2012 2013 2014 2015E 2016E 2017E


2015 年 10 月 5 日中国：开发商


Gemdale (Sell): Operation recovery priced in, limited further upside

Exhibit 58: Consolidated leverage will improve on more JV projects Funding gap analysis




Exhibit 60: Attributable land bank is falling due to substantially increased JV projects Attri. Land bank and avg. land bank cost

Exhibit 61: Valuation implies relatively stable land cost Land bank cost & est. mark-to-market value against EV



Exhibit 62: Margin recovered from 2013-14 low but limited further upside Underlying profit & gross debt yoy growth, cons. NM

Exhibit 63: Valuation premium to peers unwarranted given its still low ROE 12-month rolling P/B vs. capitalization rate, ROE



0

10

20

30

40

50

60

70

15E 16E 15E 16E 15E 16E 16E

Others

Div.

Int. exp

Tax

Cons

Land

Cash from

presales

Rental

income


financing


total debt)

14%

Other debt

Bond

(Rmb bn)

18%

1%

-2%-2%

-3.0%

-2.5%

-2.0%

-1.5%

-1.0%

-0.5%

0.0%0%

5%

10%

15%

20%

25%

30%

35%

40%




0

500

1,000

1,500

2,000

2,500

3,000

3,500

0

2

4

6

8

10

12

14

16

18

20

2008 2009 2010 2011 2012 2013 2014 2015YTD


0

20

40

60

80

100

120

Landbank value

-by market

Landbank value

-by cost

EV

Minority

MV (Latest

price)

Net debt

(treat PCS

as debt)

(Rmb bn)

-5%

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

4.5

2009 2010 2011 2012 2013 2014 2015E 2016E 2017E



0%

5%

10%

15%

20%

25%

30%

0.0

0.2

0.4

0.6

0.8

1.0

1.2

1.4

1.6

1.8

2.0

2010 2011 2012 2013 2014 2015E 2016E 2017E


2015 年 10 月 5 日中国：开发商


Evergrande (Sell): Weak balance sheet and profitability

图表 38. 2016 will remain a tough year Funding gap analysis




Exhibit 65: Declining land bank size but rising cost Attri. Land bank and avg. land bank cost

Exhibit 66: Valuation implies stable land cost Land bank cost & est. mark-to-market value against EV



Exhibit 67: Weak profitability Underlying profit & gross debt yoy growth, consolidated net margin

Exhibit 68: Reduce debt more needed to support ROE 12-month rolling P/B vs. capitalization rate, ROE



-50

0

50

100

150

200

15E 16E 15E 16E 15E 16E 16E

Others

Div.

Int. exp

Tax

Cons

Land

Cash from

presales

Rental

income


financing


total debt)

19%

Other debt

Bond

(Rmb bn)

11%

11%

-4%

-6%

-7%

-6%

-5%

-4%

-3%

-2%

-1%

0%0%

50%

100%

150%

200%

250%

300%




0

200

400

600

800

1,000

1,200

1,400

0

20

40

60

80

100

120

140

160

2008 2009 2010 2011 2012 2013 2014 2015YTD


0

50

100

150

200

250

300

Landbank value

-by market

Landbank value

-by cost

EV

Minority

MV (Latest

price)

Net debt

(treat PCS

as debt)

(Rmb bn)

0%

20%

40%

60%

80%

100%

120%

140%

0.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

8.0

9.0

10.0

2009 2010 2011 2012 2013 2014 2015E 2016E 2017E



0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

0.0

0.5

1.0

1.5

2.0

2.5

3.0

2010 2011 2012 2013 2014 2015E 2016E 2017E


2015 年 10 月 5 日中国：开发商


CRL (Neutral): Slower growth but relatively resilient ROE

图表 39. Strong balance sheet offers room to grow land bank Funding gap analysis

Exhibit 69: Higher impact from Rmb depreciation mainly due to translation loss Impact from financials on 10% Rmb depreciation



Exhibit 70: Land bank cost rising rapidly on its concentrated focus in higher-tier cities Attri. Land bank and avg. land bank cost

Exhibit 71: Valuation priced in limited growth prospect Land bank cost & est. mark-to-market value against EV



Exhibit 72: Stable margin and solid growth outlook Underlying profit & gross debt yoy growth, consolidated net margin

Exhibit 73: Decreasing ROE but relatively resilient vs. sector 12-month rolling P/B vs. capitalization rate, ROE



-20

0

20

40

60

80

100

120

15E 16E 15E 16E 15E 16E 16E

Others

Div.

Int. exp

Tax

Cons

Land

Cash from

presales

Rental

income


financing


total debt)

38%

Other debt

Bond

(Rmb bn)

58%

4%

-13%

-15%

-15.5%

-15.0%

-14.5%

-14.0%

-13.5%

-13.0%

-12.5%0%

10%

20%

30%

40%

50%

60%

70%

FX debt

exposure




0

500

1,000

1,500

2,000

2,500

3,000

3,500

0

5

10

15

20

25

30

35

40

2008 2009 2010 2011 2012 2013 2014 2015YTD


0

20

40

60

80

100

120

140

160

180

Landbank value

-by market

Landbank value

-by cost

EV

Minority

MV (Latest

price)

Net debt

(treat PCS

as debt)

(Rmb bn)

-20%

-10%

0%

10%

20%

30%

40%

50%

60%

0.0

2.0

4.0

6.0

8.0

10.0

12.0

14.0

2009 2010 2011 2012 2013 2014 2015E 2016E 2017E



0%

5%

10%

15%

20%

25%

30%

35%

40%

0.0

0.5

1.0

1.5

2.0

2.5

2010 2011 2012 2013 2014 2015E 2016E 2017E


2015 年 10 月 5 日中国：开发商


R&F (Neutral): Continuous deleveraging to support

Exhibit 74: Still tight cash flow in 2015E but to improve in 2016 Funding gap analysis




Exhibit 76: Land bank fall from 2013 peak but need to fall more Attri. Land bank and avg. land bank cost

Exhibit 77: Valuation didn’t factor in growth prospect and limited land price fall Land bank cost & est. mark-to-market value against EV



Exhibit 78: Slower growth on weak balance sheet Underlying profit & gross debt yoy growth, consolidated net margin

Exhibit 79: ROE deteriorated sharply on slow asset turn 12-month rolling P/B vs. capitalization rate, ROE



-10

0

10

20

30

40

50

60

70

15E 16E 15E 16E 15E 16E 16E

Others

Div.

Int. exp

Tax

Cons

Land

Cash from

presales

Rental

income


financing


total debt)

20%

Other debt

Bond

(Rmb bn)

16%

3%

-2%

-3%

-3.5%

-3.0%

-2.5%

-2.0%

-1.5%

-1.0%

-0.5%

0.0%0%

10%

20%

30%

40%

50%

60%

70%

80%

90%




0

200

400

600

800

1,000

1,200

1,400

1,600

1,800

2,000

0

5

10

15

20

25

30

35

40

45

50

2008 2009 2010 2011 2012 2013 2014 2015YTD


0

20

40

60

80

100

120

Landbank value

-by market

Landbank value

-by cost

EV

Minority

MV (Latest

price)

Net debt

(treat PCS

as debt)

(Rmb bn)

-10%

0%

10%

20%

30%

40%

50%

60%

70%

80%

0.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

2009 2010 2011 2012 2013 2014 2015E 2016E 2017E



0%

5%

10%

15%

20%

25%

30%

0.0

0.5

1.0

1.5

2.0

2.5

2010 2011 2012 2013 2014 2015E 2016E 2017E


2015 年 10 月 5 日中国：开发商


Longfor (Neutral): Solid balance sheet but slower growth

Exhibit 80: Solid financial position Funding gap analysis




Exhibit 82: Optimizing land bank structure; more focus on its strong markets Attri. Land bank and avg. land bank cost

Exhibit 83: Valuation implies no growth and land bank price fall Land bank cost & est. mark-to-market value against EV



Exhibit 84: Slower earnings growth on limited margin recovery potential Underlying profit & gross debt yoy growth, cons. NM

Exhibit 85: Re-leverage or higher asset turn needed to improve ROE 12-month rolling P/B vs. capitalization rate, ROE



-10

0

10

20

30

40

50

60

70

15E 16E 15E 16E 15E 16E 16E

Others

Div.

Int. exp

Tax

Cons

Land

Cash from

presales

Rental

income


financing


total debt)

54%

Other debt

Bond

(Rmb bn)

30%

2%

-2%

-3%

-3.0%

-2.5%

-2.0%

-1.5%

-1.0%

-0.5%

0.0%0%

5%

10%

15%

20%

25%

30%

35%




0

500

1,000

1,500

2,000

2,500

0

5

10

15

20

25

30

35

40

2010 2011 2012 2013 2014 2015YTD


0

20

40

60

80

100

120

Landbank value

-by market

Landbank value

-by cost

EV

Minority

MV (Latest

price)

Net debt

(treat PCS

as debt)

(Rmb bn)

-40%

-20%

0%

20%

40%

60%

80%

100%

0.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

8.0

2009 2010 2011 2012 2013 2014 2015E 2016E 2017E



0%

5%

10%

15%

20%

25%

30%

35%

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

2010 2011 2012 2013 2014 2015E 2016E 2017E


2015 年 10 月 5 日中国：开发商


Sino Ocean (Neutral): Higher growth from low-base; valuation fair

Exhibit 86: Cash flow outlook stable, control new land acquisition the key Funding gap analysis




Exhibit 88: Land bank fall substantially after disposal Attri. Land bank and avg. land bank cost

Exhibit 89: Valuation priced in limited growth prospect Land bank cost & est. mark-to-market value against EV



Exhibit 90: Higher earnings growth from low-base and margin recovery Underlying profit & gross debt yoy growth, cons. NM

Exhibit 91: ROE improvement hinges on better asset turnover 12-month rolling P/B vs. capitalization rate, ROE



-10

0

10

20

30

40

50

60

15E 16E 15E 16E 15E 16E 16E

Others

Div.

Int. exp

Tax

Cons

Land

Cash from

presales

Rental

income


financing


total debt)

23%

Other debt

Bond

(Rmb bn)

34%2%

-4% -4%

-5.0%

-4.5%

-4.0%

-3.5%

-3.0%

-2.5%

-2.0%0%

5%

10%

15%

20%

25%

30%

35%

40%

45%




0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

0

5

10

15

20

25

2008 2009 2010 2011 2012 2013 2014 2015YTD


0

10

20

30

40

50

60

70

80

Landbank value

-by market

Landbank value

-by cost

EV

Minority

MV (Latest

price)

Net debt

(treat PCS

as debt)

(Rmb bn)

-10%

0%

10%

20%

30%

40%

50%

60%

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

4.5

5.0

2009 2010 2011 2012 2013 2014 2015E 2016E 2017E



0%

5%

10%

15%

20%

25%

30%

35%

0.0

0.2

0.4

0.6

0.8

1.0

1.2

1.4

2010 2011 2012 2013 2014 2015E 2016E 2017E


2015 年 10 月 5 日中国：开发商


Yanlord (Neutral): Recovering asset turn to support mean reversion

Exhibit 92: Solid cash flow outlook on lower construction CAPEX Funding gap analysis




Exhibit 94: Land bank size and cost is largely flattish Attri. Land bank and avg. land bank cost

Exhibit 95: Valuation priced in land price fall Land bank cost & est. mark-to-market value against EV



Exhibit 96: Higher growth from low-base Underlying profit & gross debt yoy growth, cons. NM

Exhibit 97: Higher asset turn still needed to recover ROE 12-month rolling P/B vs. capitalization rate, ROE



0

5

10

15

20

25

15E 16E 15E 16E 15E 16E 16E

Others

Div.

Int. exp

Tax

Cons

Land

Cash from

presales

Rental

income


financing


total debt)

19%

Other debt

Bond

(Rmb bn)

48%

1%

-10%

-6%

-12%

-10%

-8%

-6%

-4%

-2%

0%0%

10%

20%

30%

40%

50%

60%




0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

0

1

2

3

4

5

6

2008 2009 2010 2011 2012 2013 2014 2015YTD


0

5

10

15

20

25

30

35

40

45

50

Landbank value

-by market

Landbank value

-by cost

EV

Minority

MV (Latest

price)

Net debt

(treat PCS

as debt)

(Rmb bn)

-40%

-20%

0%

20%

40%

60%

80%

100%

0.0

0.2

0.4

0.6

0.8

1.0

1.2

1.4

1.6

2009 2010 2011 2012 2013 2014 2015E 2016E 2017E



0%

5%

10%

15%

20%

25%

30%

0.0

0.2

0.4

0.6

0.8

1.0

1.2

1.4

1.6

2010 2011 2012 2013 2014 2015E 2016E 2017E


2015 年 10 月 5 日中国：开发商


CML (Neutral): Valuation reflects growth prospect from a low base

Exhibit 98: Limited financial capacity without further leverage up Funding gap analysis



hvt


Exhibit 100: New acquisitions key to sustaining growthAttri. Land bank and avg. land bank cost

Exhibit 101: Valuation implies relatively stable land cost Land bank cost & est. mark-to-market value against EV



Exhibit 102: High earnings growth driven by portfolio ramp-up; margins to stabilize at industry avg level Underlying profit & gross debt yoy growth, cons. NM

Exhibit 103: Valuation fair relative to peers with respect to its sector average return profile 12-month rolling P/B vs. capitalization rate, ROE



0

2

4

6

8

10

12

14

15E 16E 15E 16E 15E 16E 16E

Others

Div.

Int. exp

Tax

Cons

Land

Cash from

presales

Rental

income


financing


total debt)

12%

Other debt

Bond

(Rmb bn)

55%

3%

-7%

-11%

-12%

-10%

-8%

-6%

-4%

-2%

0%0%

10%

20%

30%

40%

50%

60%




0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

0

1

1

2

2

3

3

4

4

5

5

2013 2014 2015YTD


0

5

10

15

20

25

Landbank value

-by market

Landbank value

-by cost

EV

Minority

MV (Latest

price)

Net debt

(treat PCS

as debt)

(Rmb bn)

-100%

-50%

0%

50%

100%

150%

200%

250%

300%

350%

400%

450%

0.0

0.2

0.4

0.6

0.8

1.0

1.2

2010 2011 2012 2013 2014 2015E 2016E 2017E


Gross debt yoy% (RHS)(Rmb bn)(Rmb bn)

0%

2%

4%

6%

8%

10%

12%

14%

16%

18%

20%

0.0

0.5

1.0

1.5

2.0

2.5

2013 2014 2015E 2016E 2017E


2015 年 10 月 5 日中国：开发商


COGO (Neutral): Unclear positioning caps valuation upside

图表 40. Contained land banking to help repair balance sheet Funding gap analysis

Exhibit 104: Higher impact mainly due to translation loss Impact from financials on 10% Rmb depreciation


Exhibit 105: Land bank is falling on muted new acquisitions since 2Q14 Attri. Land bank and avg. land bank cost

Exhibit 106: Valuation priced in potential price fall of its land bank in tier-3 cities Land bank cost & est. mark-to-market value against EV



Exhibit 107: Margins to stabilize at a low level Underlying profit & gross debt yoy growth, cons. NM

Exhibit 108: Record low valuation reflects its cloudy growth outlook 12-month rolling P/B vs. capitalization rate, ROE



-5

0

5

10

15

20

15E 16E 15E 16E 15E 16E 16E

Others

Div.

Int. exp

Tax

Cons

Land

Cash from

presales

Rental

income


financing


total debt)

18%

Other debt

Bond

(Rmb bn)

75%

11%

-23% -23%

-25%

-20%

-15%

-10%

-5%

0%0%

10%

20%

30%

40%

50%

60%

70%

80%




1,300

1,350

1,400

1,450

1,500

1,550

1,600

1,650

1,700

0

2

4

6

8

10

12

2011 2012 2013 2014 2015YTD


0

5

10

15

20

25

Landbank value

-by market

Landbank value

-by cost

EV

Minority

MV (Latest

price)

Net debt

(treat PCS

as debt)

(Rmb bn)

-20%

0%

20%

40%

60%

80%

100%

120%

0.0

0.5

1.0

1.5

2.0

2.5

2010 2011 2012 2013 2014 2015E 2016E 2017E



0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

2010 2011 2012 2013 2014 2015E 2016E 2017E


2015 年 10 月 5 日中国：开发商


Franshion (Neutral): Big bet on top line may lift its risk profile

Exhibit 109: We see refinancing needs in order to meet management high growth target Funding gap analysis

Exhibit 110: Higher impact from Rmb depreciation mainly due to translation loss Impact from financials on 10% Rmb depreciation



Exhibit 111: Still in land banking mood regardless of high land cost Attri. Land bank and avg. land bank cost

Exhibit 112: Valuation fully reflected its concentrated portfolio in high-tier cities Land bank cost & est. mark-to-market value against EV



Exhibit 113: Weakening profitability to drag earnings growth Underlying profit & gross debt yoy growth, cons. NM

Exhibit 114: Valuation fair on its low return profile 12-month rolling P/B vs. capitalization rate, ROE



0

5

10

15

20

25

30

35

15E 16E 15E 16E 15E 16E 16E

Others

Div.

Int. exp

Tax

Cons

Land

Cash from

presales

Rental

income


financing


total debt)

16%

Other debt

Bond

(Rmb bn)

56%6%

-18% -18%

-20%

-18%

-16%

-14%

-12%

-10%

-8%

-6%

-4%

-2%

0%0%

10%

20%

30%

40%

50%

60%

70%




0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

0

1

2

3

4

5

6

7

8

9

2008 2009 2010 2011 2012 2013 2014 2015YTD


0

10

20

30

40

50

60

70

Landbank value

-by market

Landbank value

-by cost

EV

Minority

MV (Latest

price)

Net debt

(treat PCS

as debt)

(Rmb bn)

-10%

0%

10%

20%

30%

40%

50%

60%

0.0

0.5

1.0

1.5

2.0

2.5

3.0

2009 2010 2011 2012 2013 2014 2015E 2016E 2017E



0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

0.0

0.2

0.4

0.6

0.8

1.0

1.2

1.4

2010 2011 2012 2013 2014 2015E 2016E 2017E


2015 年 10 月 5 日中国：开发商


Greentown (Neutral): Transition on the way but takes time

Exhibit 115: Better cash flow management should help improve balance sheet Funding gap analysis




Exhibit 117: Land bank is falling after overly leverage during 2009-2010 sector upturn Attri. Land bank and avg. land bank cost

Exhibit 118: Valuation priced in limited growth prospectLand bank cost & est. mark-to-market value against EV



Exhibit 119: Margins to remain under near-term pressure Underlying profit & gross debt yoy growth, cons. NM

Exhibit 120: Re-rating angle hinges on improving long-term growth & return outlook which is not insight yet 12-month rolling P/B vs. capitalization rate, ROE



-10

-5

0

5

10

15

20

25

30

35

40

15E 16E 15E 16E 15E 16E 16E

Others

Div.

Int. exp

Tax

Cons

Land

Cash from

presales

Rental

income


financing


total debt)

23%

Other debt

Bond

(Rmb bn)

43%

4%

-7% -7%

-8%

-7%

-6%

-5%

-4%

-3%

-2%

-1%

0%0%

10%

20%

30%

40%

50%

60%

70%

80%




0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

4,500

5,000

0

5

10

15

20

25

30

2008 2009 2010 2011 2012 2013 2014 2015YTD


0

10

20

30

40

50

60

70

80

Landbank value

-by market

Landbank value

-by cost

EV

Minority

MV (Latest

price)

Net debt

(treat PCS

as debt)

(Rmb bn)

-40%

-30%

-20%

-10%

0%

10%

20%

30%

40%

50%

60%

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

4.5

5.0

2009 2010 2011 2012 2013 2014 2015E 2016E 2017E



0%

5%

10%

15%

20%

25%

30%

35%

0.0

0.2

0.4

0.6

0.8

1.0

1.2

1.4

2010 2011 2012 2013 2014 2015E 2016E 2017E


2015 年 10 月 5 日中国：开发商


Poly H (Neutral): No re-rating angle until execution turnaround

Exhibit 121: Balance sheet recovery slower than expected Funding gap analysis

Exhibit 122: Higher impact from Rmb depreciation mainly due to translation loss and small earnings baseImpact from financials on 10% Rmb depreciation



Exhibit 123: Still buying new projects YTD, despite poor balance sheet and low return of existing land bank Attri. Land bank and avg. land bank cost

Exhibit 124: Valuation priced in substantial price fall of its land bank Land bank cost & est. mark-to-market value against EV



Exhibit 125: Lingering pressure on margins Underlying profit & gross debt yoy growth, cons. NM

Exhibit 126: Slow asset churn results in lowest ROE among peers 12-month rolling P/B vs. capitalization rate, ROE



-5

0

5

10

15

20

25

30

15E 16E 15E 16E 15E 16E 16E

Others

Div.

Int. exp

Tax

Cons

Land

Cash from

presales

Rental

income


financing


total debt)

33%

Other debt

Bond

(Rmb bn)

17%

13%

-36%

-13%

-40%

-35%

-30%

-25%

-20%

-15%

-10%

-5%

0%0%

20%

40%

60%

80%

100%

120%

140%




0

500

1,000

1,500

2,000

2,500

3,000

0

5

10

15

20

25

2009 2010 2011 2012 2013 2014 2015YTD


0

10

20

30

40

50

60

70

80

Landbank value

-by market

Landbank value

-by cost

EV

Minority

MV (Latest

price)

Net debt

(treat PCS

as debt)

(Rmb bn)

-20%

0%

20%

40%

60%

80%

100%

120%

140%

160%

0.0

0.5

1.0

1.5

2.0

2.5

2009 2010 2011 2012 2013 2014 2015E 2016E 2017E



0%

5%

10%

15%

20%

25%

30%

35%

0.0

0.2

0.4

0.6

0.8

1.0

1.2

1.4

1.6

1.8

2010 2011 2012 2013 2014 2015E 2016E 2017E


2015 年 10 月 5 日中国：开发商


SMC (Neutral): Execution improves, albeit slowly

Exhibit 127: Financial position remains stable on contained new land acquisitions Funding gap analysis




Exhibit 129: Largely muted pipeline growth in facing tough environment for commercial property sales Attri. Land bank and avg. land bank cost

Exhibit 130: Valuation priced in largely stale land price but limited growth prospect Land bank cost & est. mark-to-market value against EV



Exhibit 131: Margin will stabilize on existing portfolio if no significant dilution from diversified business Underlying profit & gross debt yoy growth, cons. NM

Exhibit 132: Valuation premium back to last recovery cycle on moderate ROE improvement 12-month rolling P/B vs. capitalization rate, ROE



-5

0

5

10

15

20

15E 16E 15E 16E 15E 16E 16E

Others

Div.

Int. exp

Tax

Cons

Land

Cash from

presales

Rental

income


financing


total debt)

14%

Other debt

Bond

(Rmb bn)

0%

0%

0% 0%

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

70.0%

80.0%

90.0%

100.0%0%

5%

10%

15%

20%

25%

FX debt

exposure




0

500

1,000

1,500

2,000

2,500

3,000

0

1

2

3

4

5

6

7

8

9

10

2011 2012 2013 2014 2015YTD


0

5

10

15

20

25

30

35

40

Landbank value

-by market

Landbank value

-by cost

EV

Minority

MV (Latest

price)

Net debt

(treat PCS

as debt)

(Rmb bn)

-100%

0%

100%

200%

300%

400%

500%

600%

0.0

0.5

1.0

1.5

2.0

2.5

2009 2010 2011 2012 2013 2014 2015E 2016E 2017E



0%

5%

10%

15%

20%

25%

30%

35%

0.0

0.5

1.0

1.5

2.0

2.5

2010 2011 2012 2013 2014 2015E 2016E 2017E


2015 年 10 月 5 日中国：开发商


信息披露附录申明我们，王逸, CFA、李薇、管婕，在此申明，本报告所表述的所有观点准确反映了我们对上述公司或其证券的个人看法。此外，我们的薪金的任何部分不曾

与，不与，也将不会与本报告中的具体推荐意见或观点直接或间接相关。

投资摘要投资摘要部分通过将一只股票的主要指标与其行业和市场相比较来评价该股的投资环境。所描述的四个主要指标包括增长、回报、估值倍数和波动性。增长、

回报和估值倍数都是运用数种方法综合计算而成，以确定该股在地区研究行业内所处的百分位排名。

每项指标的准确计算方式可能随着财务年度、行业和所属地区的不同而有所变化，但标准方法如下：

增长是下一年预测与当前年度预测的综合比较，如每股盈利、EBITDA 和收入等。回报是各项资本回报指标一年预测的加总，如 CROCI、平均运用资本回报率

和净资产回报率。估值倍数根据一年预期估值比率综合计算，如市盈率、股息收益率、EV/FCF、EV/EBITDA、EV/DACF、市净率。波动性根据 12个月的历史

波动性计算并经股息调整。

Quantum Quantum 是提供具体财务报表数据历史、预测和比率的高盛专有数据库，它可以用于对单一公司的深入分析，或在不同行业和市场的公司之间进行比较。

GS SUSTAIN GS SUSTAIN是侧重于长期做多建议的相对稳定的全球投资策略。GS SUSTAIN关注名单涵盖了我们认为相对于全球同业具有持续竞争优势和出色的资本回

报、因而有望在长期内表现出色的行业领军企业。我们对领军企业的筛选基于对以下三方面的量化分析：现金投资的现金回报、行业地位和管理水平（公司管

理层对行业面临的环境、社会和企业治理方面管理的有效性）。

信息披露

相关的股票研究范围

王逸, CFA：中国房地产行业。李薇：中国房地产行业。

中国房地产行业：雅居乐房产、华夏幸福、招商局置地、招商地产 A、招商地产 B、中海宏洋、中国海外、华润置地、万科(A)、万科(H)、碧桂园、万达商业、

恒大地产集团、方兴地产、金地集团、绿城房产、富力地产、合景泰富、龙湖地产、保利置业、保利地产、红星美凯龙、世茂股份、华侨城、世茂房地产、瑞

安房地产、远洋地产、SOHO中国、融创中国、仁恒置地。

与公司有关的法定披露

以下信息披露了高盛高华证券有限责任公司（“高盛高华”）与北京高华证券有限责任公司（“高华证券”）投资研究部所研究的并在本研究报告中提及的公司之间

的关系。

高盛高华在过去 12个月中曾从下述公司获得投资银行服务报酬：中海宏洋 (HK$2.64)、中国海外 (HK$25.45)、华润置地 (HK$20.65)、碧桂园 (HK$2.92)、万

达商业 (HK$48.60)、方兴地产 (HK$2.19)、绿城房产 (HK$6.29)、合景泰富 (HK$5.68)、龙湖地产 (HK$10.16)、红星美凯龙 (HK$10.58)、世茂房地产 (HK$13.50)、远洋地产 (HK$5.02)、SOHO中国 (HK$3.60)

高盛高华在今后 3个月中预计将从下述公司获得或寻求获得投资银行服务报酬：华夏幸福 (Rmb21.90)、中国海外 (HK$25.45)、碧桂园 (HK$2.92)、万达商业 (HK$48.60)、恒大地产集团 (HK$4.86)、方兴地产 (HK$2.19)、绿城房产 (HK$6.29)、富力地产 (HK$7.65)、龙湖地产 (HK$10.16)、红星美凯龙 (HK$10.58)、世茂房地产 (HK$13.50)、远洋地产 (HK$5.02)、SOHO中国 (HK$3.60)、融创中国 (HK$4.98)

高盛高华在过去 12个月中与下述公司存在投资银行客户关系：华夏幸福 (Rmb21.90)、中海宏洋 (HK$2.64)、中国海外 (HK$25.45)、华润置地 (HK$20.65)、碧桂园 (HK$2.92)、万达商业 (HK$48.60)、恒大地产集团 (HK$4.86)、方兴地产 (HK$2.19)、绿城房产 (HK$6.29)、富力地产 (HK$7.65)、合景泰富 (HK$5.68)、龙湖地产 (HK$10.16)、红星美凯龙 (HK$10.58)、世茂房地产 (HK$13.50)、远洋地产 (HK$5.02)、SOHO中国 (HK$3.60)、融创中国 (HK$4.98)

没有对下述公司的具体信息披露：雅居乐房产 (HK$4.32)、招商局置地 (HK$1.36)、万科(A) (Rmb12.73)、万科(H) (HK$17.84)、金地集团 (Rmb11.93)、保利

置业 (HK$2.42)、保利地产 (Rmb7.99)、世茂股份 (Rmb9.97)、华侨城 (Rmb7.11)、瑞安房地产 (HK$1.96)、仁恒置地 (S$1.04)

公司评级、研究行业及评级和相关定义

买入、中性、卖出：分析师建议将评为买入或卖出的股票纳入地区投资名单。一只股票在投资名单中评为买入或卖出由其相对于所属研究行业的潜在回报决定。

任何未获得买入或卖出评级的股票均被视为中性评级。每个地区投资评估委员会根据 25-35%的股票评级为买入、10-15%的股票评级为卖出的全球指导原则来

管理该地区的投资名单；但是，在某一特定行业买入和卖出评级的分布可能根据地区投资评估委员会的决定而有所不同。地区强力买入或卖出名单是以潜在回

报规模或实现回报的可能性为主要依据的投资建议。

潜在回报：代表当前股价与一定时间范围内预测目标价格之差。分析师被要求对研究范围内的所有股票给出目标价格。潜在回报、目标价格及相关时间范围在

每份加入投资名单或重申维持在投资名单的研究报告中都有注明。

研究行业及评级：分析师给出下列评级中的其中一项代表其根据行业历史基本面及／或估值对研究对象的投资前景的看法。具吸引力(A)：未来 12个月内投资前

景优于研究范围的历史基本面及／或估值。中性(N)：未来 12个月内投资前景相对研究范围的历史基本面及／或估值持平。谨慎(C)：未来 12个月内投资前景

劣于研究范围的历史基本面及／或估值。

暂无评级(NR)：在高盛高华于涉及该公司的一项合并交易或战略性交易中担任咨询顾问时并在某些其他情况下，投资评级和目标价格已经根据高华证券的政策予

以除去。暂停评级(RS)：由于缺乏足够的基础去确定投资评级或价格目标，或在发表报告方面存在法律、监管或政策的限制，我们已经暂停对这种股票给予投

资评级和价格目标。此前对这种股票作出的投资评级和价格目标(如有的话)将不再有效，因此投资者不应依赖该等资料。暂停研究(CS)：我们已经暂停对该公司

的研究。没有研究(NC)：我们没有对该公司进行研究。不存在或不适用(NA)：此资料不存在或不适用。无意义(NM)：此资料无意义，因此不包括在报告内。

2015 年 10 月 5 日中国：开发商


一般披露

本报告在中国由高华证券分发。高华证券具备证券投资咨询业务资格。

本研究报告仅供我们的客户使用。本研究报告是基于我们认为可靠的目前已公开的信息，但我们不保证该信息的准确性和完整性，客户也不应该依赖该信息是

准确和完整的。我们会适时地更新我们的研究，但各种规定可能会阻止我们这样做。除了一些定期出版的行业报告之外，绝大多数报告是在分析师认为适当的

时候不定期地出版。

高盛高华为高华证券的关联机构，从事投资银行业务。高华证券、高盛高华及它们的关联机构与本报告中涉及的大部分公司保持着投资银行业务和其它业务关

系。

我们的销售人员、交易员和其它专业人员可能会向我们的客户及自营交易部提供与本研究报告中的观点截然相反的口头或书面市场评论或交易策略。我们的资

产管理部门、自营交易部和投资业务部可能会做出与本报告的建议或表达的意见不一致的投资决策。

本报告中署名的分析师可能已经与包括高华证券销售人员和交易员在内的我们的客户讨论，或在本报告中讨论交易策略，其中提及可能会对本报告讨论的证券

市场价格产生短期影响的推动因素或事件，该影响在方向上可能与分析师发布的股票目标价格相反。任何此类交易策略都区别于且不影响分析师对于该股的基

本评级，此类评级反映了某只股票相对于报告中描述的研究范围内股票的回报潜力。

高华证券及其关联机构、高级职员、董事和雇员，不包括股票分析师和信贷分析师，将不时地对本研究报告所涉及的证券或衍生工具持有多头或空头头寸，担

任上述证券或衍生工具的交易对手，或买卖上述证券或衍生工具。

在高盛组织的会议上的第三方演讲嘉宾（包括高华证券或高盛其它部门人员）的观点不一定反映全球投资研究部的观点，也并非高华证券或高盛的正式观点。

在任何要约出售股票或征求购买股票要约的行为为非法的地区，本报告不构成该等出售要约或征求购买要约。本报告不构成个人投资建议，也没有考虑到个别

客户特殊的投资目标、财务状况或需求。客户应考虑本报告中的任何意见或建议是否符合其特定状况，以及(若有必要)寻求专家的意见，包括税务意见。本报告

中提及的投资价格和价值以及这些投资带来的收入可能会波动。过去的表现并不代表未来的表现，未来的回报也无法保证，投资者可能会损失本金。

某些交易，包括牵涉期货、期权和其它衍生工具的交易，有很大的风险，因此并不适合所有投资者。外汇汇率波动有可能对某些投资的价值或价格或来自这一

投资的收入产生不良影响。

投资者可以向高华销售代表取得或通过 http://www.theocc.com/about/publications/character-risks.jsp取得当前的期权披露文件。对于包含多重期权买卖的期权

策略结构产品，例如，期权差价结构产品，其交易成本可能较高。与交易相关的文件将根据要求提供。

所有研究报告均以电子出版物的形式刊登在高华客户网上并向所有客户同步提供。高华未授权任何第三方整合者转发其研究报告。有关某特定证券的研究报

告、模型或其它数据，请联络您的销售代表。

北京高华证券有限责任公司版权所有 © 2015 年

未经北京高华证券有限责任公司事先书面同意，本材料的任何部分均不得(i)以任何方式制作任何形式的拷贝、复印件或复制品，或(ii)再次分发。

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