Event

China Overseas Land (688 HK, HK$22.95, Neutral, TP: HK$19.15) reportedvery strong contracted sales of HK$14.7bn in January, up 161% MoM and273% YoY. GFA sold was 930k sqm, up 114% MoM and 264% YoY. ASP wasHK$15,800/sqm vs HK$12,935/sqm in December and the 2012 average ofHK$15,295/sqm. 2012 full-year sales were HK$111.5bn, up 28% YoY,exceeding the company’s new FY target of HK$100bn. The company acquired2 new projects in Kunming and Beijing with total attributable GFA of 405k sqm.

Total land premium was Rmb2.5bn. We believe more land replenishment is stillneeded to secure medium-term growth.

China Overseas Grand Oceans (81 HK, HK$10.92, Outperform, TP:HK$7.99) reported January contracted sales of HK$2.0bn, up 587% MoM.

GFA sold was 171k sqm, up 284% MoM. ASP was HK$11,710/sqm vsHK$6,539/sqm in December and the 2012 average of HK$13,065/sqm. 2012full-year sales were HK$13.5bn, representing 104% of the company’s FYtarget of HK$13bn. During January, COGO acquired 2 sites in Hohhot andYancheng with total attributable GFA of 711k sqm and land premium ofRmb1.2bn. In 2012, the company acquired 3.7m sqm of sites to prepare for itsmid-term growth. We upgraded the stock after its interim result to reflect ourincreased confidence in management’s ability to penetrate and commandmarket share in tier-3 cities, as well as its discipline in cost control and pricingability versus peers.

Agile Property (3383 HK, HK$10.72, Outperform, TP: HK$12.77) reportedmoderate monthly sales of Rmb2.5bn for January, down 59% MoM but up 19%YoY. ASP was Rmb10,783/sqm vs Rmb14,634/sqm in December and the2012 average of Rmb10,207/sqm. In 2012, the company achievedRmb33.1bn sales, 5% higher than its target. In January, Hainan ClearwaterBay recorded Rmb540m contracted sales, while Imperial Palace Nanjing andAgile Cambridgeshire Guangzhou recorded contracted sales of Rmb340mand Rmb230m respectively. Sino-Ocean Land (3377 HK, HK$5.8, Neutral,TP: HK$3.56) reported strong January contracted sales of Rmb3.95bn, up119% MoM and 1286% YoY.

Shui On Land (272 HK, HK$3.74, Neutral, TP: HK$3.90) reported strongsales of Rmb2.2bn in January mainly due to the launch of RHXC phase 5.

The company also announced its 2013 sales target of Rmb9bn with additionalRmb2bn en-bloc sales of commercial properties.

Outlook

25 key developers reported contracted sales for January. By January, saleshad grown 188% YoY and ASPs were up 8%. MoM, January sales grew 16%with prices up 6%. The sales performance of major developers is likely to varydue to differences in strategies, saleable resources and execution skills. Weexpect Sunac (1918 HK, HK$6.03, Outperform, TP: HK$8.54), ChinaResources Land (1109 HK, HK$22.80, Outperform, TP: HK$21.53), and KaisaGroup (1638 HK, HK$2.58, Outperform, TP: HK$3.19) to perform well interms of sales due to their higher number of launches.

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