Surpassed revised-up target by 10% as of Nov

COLI announced that for 11M13 it has already achieved accumulatedcontracted sales of HK$131.8bn (including HK$15.8bn contributed by COGO),with accumulated contracted GFA of 8.7msqm (including 1.5msqm fromCOGO), with 11M13 contracted ASP down 2% YoY to HK$15,063psm due tosales mix change. For Nov, COLI's contracted sales were up 3% MoM toHK$10.1bn (HK$1.216bn from COGO), and monthly contracted GFA down 8%MoM to 665ksqm (104ksqm from COGO). Monthly contracted ASP was up12% MoM to HK$15,221psm.

Sales improved on MoM basis form Oct2013

Contracted sales saw a 3% MoM increase with ASP having climbed 12% fromOct. Much improved from the double digit MoM decline in contracted sales inOct. As of end-Oct COLI has subscription sales (not yet contracted) ofHK$9.3bn (with subscription GFA of 402.8ksqm). Based on COLI’s pace ofcontracted sales and latest subscription sales to be contracted, we expectCOLI’s full-year 2013 contracted sales to be about HK$130-135bn.

We expect COLI’s saleable resources in 2014 to rise by another 25% YoY

For 2014, we expect its sales to be even stronger (even before the potentialasset injection from the parent) given strong growth in new construction startsin 2013. COLI’s maximum GFA under construction in 2013 was about 25msm,up sharply from 20msm in 2012. This should translate into strong increases insaleable resources in 2014, and we believe COLI’s contracted sales in 2014 willwell exceed HK$160bn.

Convincing valuations at 34% NAV discount, 8.7x 2013E P/E, 7.2x 2014E P/E

We base our target price of HK$31.15 on NAV of HK$34.61. Given highvisibility for solid earnings growth in 2013-16, COLI's current P/Es also lookattractive. With the parent support, we see high upside potential to estimatedNAV and earnings. Risks: new tightening, weaker sales, unexpected economicvolatility.

相关附件