Sunac China Holdings Ltd
- ExchangeBerlin Stock Exchange
- SectorReal Estate Investment & Services
Affected by the epidemic, sales plans of developers have been delayed, while the pace of cash collection is expected to slow down. But the relaxation in monetary policy would provide some relief to the liquidity pressures of developers. Also, since 4Q19, the cases of failed land auctions have been growing steadily while land premium rates have been on a downtrend. Therefore, the frequent introduction of local policies is targeted at encouraging developers to acquire land. Hence, we maintain OVERWEIGHT on the sector.
We have studied the impact of the new coronavirus on the property sector based on the policy, economic and developers’ fundamentals, and compared the impact of the SARS epidemic on the property sector in 2003. We expect the epidemic to have a negative impact on the property sector in 2020, but the possibility of policy easing is expected to increase. At the same time, purchase demand will only be delayed, not eliminated. Hence, we maintain OVERWEIGHT on the sector.
In Jan 20, equity markets plummeted due to the outbreak of the new coronavirus. Lockdowns and extended Lunar New Year holidays across provinces are hurting the manufacturing, retail and transportation sectors. We remove Ausnutria Dairy, Wuxi Biologics and Tongcheng-elong from our BUY list and close out names that are prone to profit-taking, such as Zoomlion and Sany Heavy. Add beneficiaries of the virus outbreak CSPC and Mindray.
Major developers such as Sunac, Longfor, Seazen and Shimao had each announced share placements this month. We identify the developers under our coverage who will most likely conduct the next share placements, mainly based on an assessment of their: a) liquidity and gearing, b) discounts from all-time share price highs; and c) the time lapse since the last placement. Maintain OVERWEIGHT.
Although there will not be a loosening of macro policies, regulations will be adjusted in accordance with the “One City, One Policy” strategy. Local governments are introducing exploratory policies that are in line with our views. The downside for property stocks’ prices is limited. The sector’s valuations are also at historical lows but are expected to recover at the beginning of 1Q20. Maintain OVERWEIGHT.
Announcement: Moody's: Sunac's weakened 2016 credit metrics within expectations; ratings unaffected. Global Credit Research- 29 Mar 2017. Hong Kong, March 29, 2017-- Moody's Investors Service says that Sunac China Holdings Limited's weakened credit metrics for 2016 year-over-year were largely in line with Moody's expectations and will not immediately impact the company's B2 corporate family rating, B3 senior unsecured rating or the negative outlook on the ratings.
UOB Kay Hian published on 11th December a 143-page China/HK strategy report, which highlights our preferred sectors and stocks for 1H 2020. The report includes sections on:- * Market Strategy for 2020: pages 4 – 15; * Stock Recommendations: page 16; * China 2020 Economic Outlook: pages 17 – 26; * Review of Sectors: pages 27 – 112; * Company Updates - Top Stock Picks: pages 114 – 143. For more information about the UOBKayHian dealing services in the Asia-Pacific region and the research on Asian companies (including bespoke packages and free trials), please contact David Osman or Simon Dickson i...
Feasibility Study Results in December to be a Catalyst for this Junior