Quote | Super Quote
Super Quote   |   Detail Quote   |   Interactive Chart   |   Transaction   |   Related News   |   Related Securities   |   Company Information   |   Dividend Records   |   Short Sell
00688 CHINA OVERSEAS
RTNominal down10.620 -0.280 (-2.569%)
Others

12/10/2018 15:35

[I-bank focus]Bad news seen for China real estate sector

[ET Net News Agency, 12 October 2018] HSBC Global Research said the China real estate
sector has taken a beating and is now trading at an NAV discount of 62% and a 2019 PE of
4.1x, both more than one standard deviation below historical mean.
These levels were last seen in the previous property downcycle, which started in 2014.
However, HSBC believes it is still too soon to bottom-fish and anticipates more bad news
ahead. It expects to see price cuts as we approach year-end and developers step up project
launches amid intensified competition to hit growth targets.
HSBC forecast a sliding scale of ASP corrections in different categories of cities next
year - flat in tier 1, -3% in tier 2, and -5% in tier 3.
It also forecast a 10% decline in national transaction volumes, but HSBC thinks these
moderate price cuts can help underpin the sales of more successful developers. This is
important, as the market gives far more weight to sales volume than to the ASP growth of
developers.
But HSBC said housing inventory is down 20-35% across city tiers - the situation was
much worse in the 2014 property downcycle - creating a buffer for the housing market. It
believes the inflection point for property stocks may arrive only in 1Q 2019.
It thinks price cuts will reduce government concerns about overheating and lower the
risk of further policy restrictions being applied to the market. HSBC revised its target
prices for the Chinese developers as follows:
Name Rating Target Price
----------------------------------------------------
Agile (03383) Hold HK$9.50 from HK$14.1
COLI (00688) Buy HK$31.00 from HK$36
CR Land (01109) Buy HK$37.30 from HK$39
China SCE (01966) Buy HK$4.00 from HK$5
CIFI (00884) Buy HK$4.80 from HK$6.6
CG (02007) Reduce HK$6.60 from HK$10.5
Jinmao (00817) Buy HK$4.90 from HK$4.5
GZ R&F (02777) Hold HK$14.80 from HK$16.2
Joy City (00207) Buy HK$1.30 from HK$1.4
KWG (01813) Hold HK$6.40 from HK$10
Logan (03380) Buy HK$10.60 from HK$12.1
Longfor (00960) Buy HK$25.80 from HK$29.9
Shimao (00813) Buy HK$27.30 from HK$33.2
Sino-Ocean (03377) Buy HK$4.00 from HK$5.6
SOHO China (00410) Reduce HK$2.60 from HK$2.6
SZI (00604) Hold HK$2.20 from HK$2.6

(KL)

Remark: Real time quote last updated: 19/03/2024 10:09
  Real-time basic market prices of Hong Kong securities are provided by HKEx; a Designated Website authorized by the HKEx Group to provide the Service
A Member of HKET Holdings
Customer Service Hotline:(852) 2880 7004     Customer Service Email:cs@etnet.com.hk
Copyright 2024 ET Net Limited. http://www.etnet.com.hk ET Net Limited, HKEx Information Services Limited, its Holding Companies and/or any Subsidiaries of such holding companies, and Third Party Information Providers endeavour to ensure the availability, completeness, timeliness, accuracy and reliability of the information provided but do not guarantee its availability, completeness, timeliness, accuracy or reliability and accept no liability (whether in tort or contract or otherwise) any loss or damage arising directly or indirectly from any inaccuracies, interruption, incompleteness, delay, omissions, or any decision made or action taken by you or any third party in reliance upon the information provided. The quotes, charts, commentaries and buy/sell ratings on this website should be used as references only with your own discretion. ET Net Limited is not soliciting any subscriber or site visitor to execute any trade. Any trades executed following the commentaries and buy/sell ratings on this website are taken at your own risk for your own account.