【研究报告内容摘要】
Project of the week: Sunac/Greentown – MelodiousManor Hangzhou. We recently visited Sunac’s (1918.HK,Not-rated) low rise project close to Xixi Wetland park.
Despite Sunac’s 75% stake in the project, it is namedGreentown Melodious Manor, with the intention toleverage on Greentown’s brand image in Hangzhou. Theproject is of good quality, given Greentown’s strength oflandscaping and building fa?ade, as well as Sunac’s skillsin improving internal efficiency of smaller units. It wasinitially launched at an ASP of Rmb20k/sm for apartments(120-230sm/unit) and an ASP of Rmb33k/sm fortownhouses (300sm/unit) in mid-Oct. Good response wasreceived with a high sales-through rate of 85% within twoweeks after launch. By end-Oct, contracted sales havereached Rmb0.6bn, locking in 75% of its 2013 target ofRmb0.8bn. Local sales persons expect higher ASPs for thenext launch (Rmb21k/sm for apartments and Rmb35-38k/sm for townhouses). We expect the project to delivergood gross margin/net margin of >35%/17% respectively.
Policy update: Tier I cities likely to follow Shenzhen to raisedown payment requirement for second home purchases.
Shenzhen has raised its minimum down paymentrequirement of second home purchases from 60% to 70%.
Our channel checks revealed that PBOC Shanghai alsorequires local banks to control mortgage loans for the rest ofthe year and raise minimum down payment ratio to 70% forsecond home purchases. It is also rumoured that Guangzhouwill follow suit. Beijing is rumoured to have suspended theapprovals of presales permits for projects with ASPs higherthan Rmb40k/sm for the rest of the year.
Property sales: Buying sentiments remain strong in Tier I/IIcities. There were 11 launches last week in Tier I cities,offering a total of 2,139 units. Average sales-through rateimproved to 73%. There were 13 launches (2,621 units) inmajor Tier II cities with average sales-through rateincreasing to 71%. Last week, sales volumes climbed7%/14%/-6% w-o-w in major Tier I/II/III cities, while ASPsrose 1%/2%/2% respectively. YTD sales volumes went up18%/29%/43% in major Tier I/II/III cities. According toSoufun, the ASPs in 100 monitored cities continued totrend up in Oct with a m-o-m growth of 1.2%.
Focus on reputable developers. The sector is now tradingat 6.4x FY14 PE, 0.9x P/BV and 49% discount to NAV (vs.
its historical average of 10x/1.2x/37%). With growingpolicy uncertainties arising from continued ASP hikes, werecommend that investors focus on developers’fundamentals and sustainability. Our top picks are COLI,CR Land, COGO and Franshion.