[ET Net News Agency, 5 January 2018] HSBC Global Research said the past two years saw
an unprecedented expansion of China's property market, driving the sector's strong share
price rally in 2017.
The research house turned more cautious on the sector in September 2017, but it now sees
opportunities emerging this year in what is likely to be a trickier market as liquidity
tightens.
HSBC believes sales volumes will correct by 5% y-o-y as the government is unlikely to
unwind property cooling measures, while average selling prices (ASPs) should stay
resilient amid limited supply.
While it is positive that developers are still on a quest for growth, HSBC said high
expectations present a challenge that is difficult to beat. After share prices rose by an
average of 86% in 2017, HSBC expects a year of diverging performance in terms of sales
execution and stock performance.
HSBC revised its target rpice for the Chinese property developers as follows:
Name Rating Target Price
--------------------------------------------------
Agile (03383) Hold HK$12.0 to HK$13.3
COLI (00688) Buy HK$33.4 to HK$34.2
CR Land (01109) Buy HK$32.2 to HK$33.0
CIFI (00884) Buy HK$5.1 to HK$6.1
CG (02007) Reduce HK$6.5 to HK$9.0
China Jinmao (00817) Hold HK$4.1
GZ R&F (02777) Hold HK$19.2 to HK$19.7
Joy City (00207) Hold HK$1.4
KWG (01813) Hold HK$8.3 to HK$9.4
Logan (03380) Buy HK$9.2 to HK$9.5
Longfor (00960) Buy HK$25.4 to HK$27.0
Shimao (00813) Buy HK$20.6 to HK$22.5
Shui On (00272) Hold HK$2.3 to HK$2.4
Sino-Ocean (03377) Buy HK$7.1 to HK$7.0
SOHO (00410) Hold HK$4.9 to HK$4.8
SZ Investment (00604) Hold HK$3.4

(KL)