[ET Net News Agency, 15 July 2019] HSBC Global Research said good HK real estate sector
share price performance in 1H was largely driven by the cyclical rebound of the housing
price (+9%), but the research house expects 2H to be supported by strong primary sales and
a more dovish rate environment.
Market sentiment has been improving and home buyers are rushing back to the primary
market, with developers likely expediting launches to catch this momentum and secure
profits, it noted.
HSBC said it is positively surprised to see good demand for "T-Plus" project by Jiayuan
International (02768), which was 34x oversubscribed of 34x for the upcoming sales of 344
units this weekend.
Meanwhile, SHK Properties (00016) management expressed a constructive outlook on the 2H
housing market, expecting it to stay strong versus 1H, with similar sales and volumes.
In 1H, primary sales and volumes were up 21%/62% to HK$136bn/12.3k units respectively.
It implies 2019 primary sales growing 20% to HK$272bn and units sold growing 59% to 24.6k.
This is higher than HSBC's bullish 2019 estimates for 18% and 31% growth.
Strong primary sales momentum in 2H looks set to drive a 15-year primary sales high,
HSBC noted.
HSBC suggested that investors focus on developers, like SHK Properties and Wheelock
(00020), which have sizeable land banks that can be consistently replenished. It prefers
companies with one or more of following factors (1) market leadership; (2) re-rating
potential; and (3) an attractive FY2020 dividend yield of >4%. (KL)