reports
- Damon Shen
- Jieqi Liu
China And Hong Kong Property: A comparison between H-REITs and C-REIT...
CSRC announced on 19 April that China and Hong Kong REITs will be included in Stock Connect. In the short term, we believe investors will find H-REITs attractive, considering the quality of underlying assets and liquidity of the stocks. Please find an updated list of C-REITs and H-REITs in this report. Maintain MARKET WEIGHT on Hong Kong’s and China’s property sectors. Maintain BUY on LINK REIT, which is trading at an 2025 yield of 8%.
00016 SUN HUNG KAI PROPERTIES LIMITED
00823 LINK REAL ESTATE INVESTMENT TRUST
01109 CHINA RESOURCES LAND LIMITED
SCNR SUNAC CHINA HOLDINGS LTD.
RLF LONGFOR GROUP HOLDINGS LTD.
00014 HYSAN DEVELOPMENT CO. LTD.
01997 WHARF REAL ESTATE INVESTMENT CO. LTD.
00017 NEW WORLD DEVELOPMENT CO. LTD.
360ONE 360 ONE WAM LTD
- Damon Shen
- Jieqi Liu
Hong Kong Property: Expect modest pull-back of primary sales in 2Q24; ...
CCL Index fell after increasing for three consecutive weeks while CVI Index rose over 60, reflecting a change in banks' attitude towards granting mortgages from lukewarm to optimistic. CRI rose again by 0.55% mom. With expectation of fewer interest cuts, we foresee primary sales pulling back in 2Q24. However, we maintain our forecast of property prices (-2%) and maintain MARKET WEIGHT on the sector. We prefer retail landlords over developers. Top pick: Wharf REIC.
- Damon Shen
- Jieqi Liu
Link REIT (823 HK): Takeaways from pre-blackout conference call.
For LINK’s pre-blackout conference call on 27 Mar 24, the key takeaways are: a) tenant sales growth of Hong Kong retail moderated to +1.3% in 3QFY24 from +3.1% 1HFY24, b) China’s retail sales surpassed pre-COVID-19 levels during CNY, c) the overseas portfolio saw a stronger performance, and d) management reiterated its developed market acquisition strategy. Trim FY24-26 DPU estimates by 0.6-5.4%. Maintain BUY with a target price of HK$48.15.
- Bella Lu Yifei
- Carol Dou Xiao Qin
- Damon Shen
- Greater China Research Team
- Jieqi Liu
- Jo Yee Ng
- Ken Lee
- Kenny Yong Hui Lim
- Shirley Wang Xueyi
- Stella Guo Yuting
- Sunny Chen
Greater China Daily: Thursday, March 28, 2024
KEY HIGHLIGHTS Results BYD Company (1211 HK/SELL/HK$201.60/Target: HK$140.00) 4Q23: Earnings up 19% yoy but down 17% qoq, in line. Management guides for flat earnings in 2024. Maintain SELL. Target price: HK$140.00. China Mengniu Dairy (2319 HK/BUY/HK$17.08/Target: HK$22.50) 2023: Missed estimates on one-off loss; weak demand to persist in the near term. China Merchants Bank (3968 HK/BUY/HK$30.95/Target: HK$44.00) 2023: Rise to the occasion. Country Garden Services (6098 HK/HOLD/HK$5.27...
02328 PICC PROPERTY & CASUALTY CO. LTD. CLASS H
EZQ CHINA MENGNIU DAIRY CO. LTD.
M3I MINTH GROUP LIMITED
000333 MIDEA GROUP CO. LTD. CLASS A
M4B CHINA MERCHANTS BANK CO. LTD. CLASS H
1211 BYD COMPANY LIMITED CLASS H
06862 HAIDILAO INTERNATIONAL HOLDING LTD.
3933 THE UNITED LABORATORIES INTE
333 MIDEA GROUP
06098 COUNTRY GARDEN SERVICES HOLDINGS CO. LTD.
6049 POLY PROPERTY SERVICES CO LTD
2269 WUXI BIOLOGICS (CAYMAN) INC.
- Bella Lu Yifei
- Carol Dou Xiao Qin
- Damon Shen
- Heidi Mo Jinghui
- Jieqi Liu
- Jo Yee Ng
- Ken Lee
- Kenny Yong Hui Lim
- Llelleythan Tan Tan
- Shirley Wang Xueyi
- Stella Guo Yuting
- Stevanus Juanda
- Sunny Chen
- Tanaporn Visaruthaphong
Regional Morning Notes - Thursday, March 28, 2024
GREATER CHINA Results BYD Company (1211 HK/SELL/HK$201.60/Target: HK$140.00): 4Q23: Earnings up 19% yoy but down 17% qoq, in line. Management guides for flat earnings in 2024. Maintain SELL. Target price: HK$140.00. China Merchants Bank (3968 HK/BUY/HK$30.95/Target: HK$44.00): 2023: Rise to the occasion. Haidilao International Holding (6862 HK/BUY/HK$16.86/Target: HK$18.80): 2023: In line; revenue growth on higher table turnover in 2024. Midea Group (000333 CH/BUY/Rmb63.67 /Target: Rmb76.20): 20...
02328 PICC PROPERTY & CASUALTY CO. LTD. CLASS H
C52 COMFORTDELGRO CORPORATION LIMITED
M3I MINTH GROUP LIMITED
000333 MIDEA GROUP CO. LTD. CLASS A
M4B CHINA MERCHANTS BANK CO. LTD. CLASS H
1211 BYD COMPANY LIMITED CLASS H
06862 HAIDILAO INTERNATIONAL HOLDING LTD.
3933 THE UNITED LABORATORIES INTE
ICBP INDOFOOD CBP SUKSES MAKMUR T
TTB TMBTHANACHART BANK PCL
BUKA BUKALAPAK.COM PT TBK
- Damon Shen
- Jieqi Liu
China And Hong Kong Property Strategy: Channel checks and observations...
In Shanghai, the new home market shrank further with divergence among regions; the secondary market saw volume rebound with a weak ASP performance. In Hong Kong, sales performance is still divergent among developers despite new home transactions growing by nearly 15x mom in Mar 23, reflecting a mild recovery of market sentiment. Maintain MARKET WEIGHT. Top picks: CR Land, COLI, SHKP and LINK REIT.
00016 SUN HUNG KAI PROPERTIES LIMITED
00823 LINK REAL ESTATE INVESTMENT TRUST
01109 CHINA RESOURCES LAND LIMITED
SCNR SUNAC CHINA HOLDINGS LTD.
RLF LONGFOR GROUP HOLDINGS LTD.
00884 CIFI HOLDINGS (GROUP) CO. LTD.
00014 HYSAN DEVELOPMENT CO. LTD.
01997 WHARF REAL ESTATE INVESTMENT CO. LTD.
1238 POWERLONG REAL ESTATE HOLDINGS LTD
00017 NEW WORLD DEVELOPMENT CO. LTD.
- Damon Shen
- Jieqi Liu
China And Hong Kong Property Strategy: Monitoring the recovery of seco...
New-home sales in 50 core mainland cities weakened further in the second week of March. Second-hand home sales in Beijing/Shanghai/Guangzhou/Shenzhen are picking up while transaction volume was still lower yoy in Jan-Feb 24. Hong Kong property sales volume continues to surge. However, home buyers are still very picky and sensitive to pricing. Maintain MARKET WEIGHT on the China and Hong Kong property sector. Expect attitudes toward POE and quasi-SOE developers to improve in the near term.
00823 LINK REAL ESTATE INVESTMENT TRUST
01109 CHINA RESOURCES LAND LIMITED
SCNR SUNAC CHINA HOLDINGS LTD.
RLF LONGFOR GROUP HOLDINGS LTD.
00884 CIFI HOLDINGS (GROUP) CO. LTD.
00014 HYSAN DEVELOPMENT CO. LTD.
01997 WHARF REAL ESTATE INVESTMENT CO. LTD.
1238 POWERLONG REAL ESTATE HOLDINGS LTD
00017 NEW WORLD DEVELOPMENT CO. LTD.
86 SUN HUNG KAI & CO LTD
- Damon Shen
- Jieqi Liu
China and Hong Kong Property Strategy: Divergence of policies and prop...
The 2024 NPC meeting gave little evidence of strong policy support to the property sector. New-home sales in 50 core mainland cities remain weak. Second-hand home sales in Beijing/Shanghai/Guangzhou/Shenzhen are picking up. Hong Kong saw a very strong rebound in new-home sales after the 2024 Budget Speech. Maintain MARKET WEIGHT on the China and Hong Kong property sector. Expect a continuous sales recovery to drive the re-rating of Hong Kong developers.
00016 SUN HUNG KAI PROPERTIES LIMITED
00823 LINK REAL ESTATE INVESTMENT TRUST
01109 CHINA RESOURCES LAND LIMITED
SCNR SUNAC CHINA HOLDINGS LTD.
RLF LONGFOR GROUP HOLDINGS LTD.
00884 CIFI HOLDINGS (GROUP) CO. LTD.
00014 HYSAN DEVELOPMENT CO. LTD.
01997 WHARF REAL ESTATE INVESTMENT CO. LTD.
1238 POWERLONG REAL ESTATE HOLDINGS LTD
00017 NEW WORLD DEVELOPMENT CO. LTD.
- Damon Shen
- Jieqi Liu
Hong Kong Property: Government removes all cooling measures on Hong Ko...
Financial Secretary Paul Chan delivered the 2024-25 Budget speech in the morning, announcing the removal of all cooling measures (BSD, NRSD and SSD) on property transactions. HKMA also eased countercyclical macroprudential measures for mortgage loans. Overall, in the near term, we expect a strong rebound of transactions to help the stabilisation of property price. Upgrade sector to MARKET WEIGHT on higher transaction volume and better liquidity for developers. Top pick: SHKP.
- Damon Shen
- Jieqi Liu
LINK REIT (823 HK) - Acquiring Remaining 50% Stake In Qibao Vanke Plaz...
LINK REIT announced the acquisition of a 50% stake in Qibao Plaza from Vanke on 9 Feb 24. The agreed property value is 24% lower than the latest market valuation and implies an NPI yield of over 6.5%. We estimate an 0.74% accretion to FY25 DPU. Higher gearing and allocation to mainland China are justified by good valuation. Maintain BUY. Target price: HK$50.70.
- Damon Shen
- Greater China Research Team
- Jieqi Liu
- Benjaphol Suthwanish
- Damon Shen
- Jacquelyn Yow Hui Li
- Jieqi Liu
- Jonathan Koh
- Kitpon Praipaisarnkit
- Leow Huey Chuen
- Nurul Nazira Binti Abdullah
Regional Morning Notes - Wednesday, February 14, 2024
GREATER CHINA Update LINK REIT (823 HK/BUY/HK$38.30/Target: HK$50.70): Acquiring remaining 50% stake in Qibao Vanke Plaza at bargain price. MALAYSIA Sector Plantation: MPOB Jan 24: Malaysia’s palm oil inventory came in below market expectations due to stronger-than-expected exports and strong domestic disappearance. Update Sunway (SWB MK/BUY/RM2.72/Target: RM3.01): Inclusion in KLCI Index soon? SINGAPORE Results Mapletree Pan Asia Commercial Trust (MPACT SP/BUY/S$1.39/Target: S$1.86): 3QFY24...
- Damon Shen
- Jieqi Liu
Hong Kong Property: CCL Index stabilises in Jan 24; channel checks on ...
The CCL index stabilised in Jan 24. Transaction volumes are hovering at a low level but we expect more project launches after the Chinese New Year. Our recent channel checks revealed poor implementation of the easing of property measures for non-PR homebuyers. Rising rental yield may provide some downside protection to property prices. Maintain UNDERWEIGHT. SHKP and LINKREIT remain our top picks for their defensiveness.
- Damon Shen
- Jieqi Liu
Hong Kong Property: Marginal improvement in secondary market seen in J...
The CCL index declined 6.1% in 2023, while the CVI index has been staying below 20 since Sep 23. In Jan 24, secondary transactions of 10 major real estates went up 10.8% mom (Dec 23: +9.8% mom). The sustainability of sales recovery needs to be monitored. With higher-than-expected fiscal deficits for 2023-24, the upcoming Budget speech will be a key focus in the near term. With a historically high inventory level, property prices remain under pressure. Maintain UNDERWEIGHT.
- Damon Shen
- Jieqi Liu
Hong Kong Property: 2024 outlook for Hong Kong retail market and landl...
In 11M23, Hong Kong’s tourist arrivals and retail sales reached 51.3% and 84.1% of 11M18 levels. However, it will be quite challenging to achieve further recovery. For 2024, we estimate 15% yoy growth in tourist arrivals and 2% yoy growth in retail sales. Office landlords are facing long-term pressure of cap rate expansion. Maintain UNDERWEIGHT on the property sector. LINK REIT is our top pick. We lower our target prices for Wharf REIC and Hysan in view of lower underlying net profit and DPS est...
- Greater China Research Team
- Tham Mun Hon
Greater China Strategy: Staying the course -- We expect China’s real G...
The Chinese economy will see a gradual climb higher in 2024, hitting 4% yoy growth, with private consumption providing much of the heavy lifting. Policy easing will be incremental, focusing on the real estate sector and local government financing. Until these issues are resolved, PE expansion will be limited. Thus, EPS growth will be the key driver, with an index target of 67.3pt. Our focus is on smart consumption, premiumisation and turnaround stocks, staying negative on the auto sector.
AS7 ANTA SPORTS PRODUCTS LTD.
NEH NETEASE INC. SPONSORED ADR
00992 LENOVO GROUP LIMITED
00823 LINK REAL ESTATE INVESTMENT TRUST
SXC SUNNY OPTICAL TECHNOLOGY (GROUP) CO. LTD.
01299 AIA GROUP LIMITED
RLF LONGFOR GROUP HOLDINGS LTD.
600519 KWEICHOW MOUTAI CO. LTD. CLASS A
00027 GALAXY ENTERTAINMENT GROUP LIMITED
01810 XIAOMI CORP. CLASS B
PDD PINDUODUO INC. SPONSORED ADR CLASS A
1093 CSPC PHARMACEUTICAL GROUP LTD
291 CHINA RESOURCES BEER HOLDINGS CO LTD
9999 HK PINDUODUO PDD US
NETEASE INC
- Greater China Research Team
- Tham Mun Hon
Greater China Market Strategy: 2024 - Staying the course
The Chinese economy will see a gradual climb higher in 2024, hitting 4% yoy growth, with private consumption providing much of the heavy lifting. Policy easing will be incremental, focusing on the real estate sector and local government financing. Until these issues are resolved, PE expansion will be limited. Thus, EPS growth will be the key driver and our index target is at 67.3pt. Our focus is on smart consumption, premiumisation and turnaround stocks. Staying the course. The Central Financ...
AS7 ANTA SPORTS PRODUCTS LTD.
NEH NETEASE INC. SPONSORED ADR
00992 LENOVO GROUP LIMITED
00823 LINK REAL ESTATE INVESTMENT TRUST
SXC SUNNY OPTICAL TECHNOLOGY (GROUP) CO. LTD.
01299 AIA GROUP LIMITED
RLF LONGFOR GROUP HOLDINGS LTD.
600519 KWEICHOW MOUTAI CO. LTD. CLASS A
00027 GALAXY ENTERTAINMENT GROUP LIMITED
1211 BYD COMPANY LIMITED CLASS H
01810 XIAOMI CORP. CLASS B
PDD PINDUODUO INC. SPONSORED ADR CLASS A
1093 CSPC PHARMACEUTICAL GROUP LTD
291 CHINA RESOURCES BEER HOLDINGS CO LTD
9999 HK PINDUODUO PDD US
NETEASE INC
- Damon Shen
- Jieqi Liu
Hong Kong Property: Stay cautious in 1H24; downgrade Hong Kong propert...
With negative carry of property investment and outflow of tourists, we expect developers and landlords to continue facing multiple challenges in 1H24. Given the weaker-than-expected property market recovery after the 2023 Policy Address, we downgrade the sector to UNDERWEIGHT. We cut target prices of SHKP, NWD, Wharf REIC and Hysan. LINK REIT and SHKP remain our top picks.
- Damon Shen
- Jieqi Liu
Link REIT (823 HK) - Takeaways From Shenzhen And Guangzhou Property To...
We visited Central Walk, Liwan Link Plaza and Tianhe Link Plaza on 20-21 Nov 23. LINK REIT strengthened its mix of F&B tenants and shifted to more leisure and entertainment tenants to cater to the latest trend. Both Central Walk Shenzhen and Liwan Plaza saw record daily footfalls. Tenant sales are still below pre-COVID-19 levels due to the weaker performance of retail tenants. We expect the China retail portfolio to improve in 2024 on the adjusted tenant mix and completion of AEI. Maintain BUY. ...
- Damon Shen
- Jieqi Liu
- Terence Chiu
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