KEY HIGHLIGHTS Sector Property And Property Management: Encouraging property sales during Golden Week; watching policy implementation and improvement in fundamentals in 4Q24. TRADERS’ CORNER Power Assets Holdings (6 HK): Trading buy range: HK49.85-50.25 Shenzhou International Group (2313 HK): Trading buy range: HK$64.60-65.20
For 1-7 Oct 24, average daily primary/secondary transactions in 50 major cities grew 65%/98% yoy respectively. With enhanced policies, we expect the decline in primary sales GFA to narrow to -8% yoy in 4Q24, from -12.5% in Jul-Aug 24, with stabilisation of new home prices in tier 1 cities. For PM companies, higher transaction volume will benefit VAS. Policy implementation and improvement in fundamentals will be a key catalyst. Maintain MARKET WEIGHT. Top picks: CR Land, Longfor, COPH.
GREATER CHINA Sector Property and Property Management Encouraging property sales during Golden Week; watching policy implementation and improvement in fundamentals in 4Q24. INDONESIA Asian Gems Corporate Highlights Bank Central Asia (BBCA IJ/BUY/Rp10,450/Target: Rp12,000) Plenty of room to grow. Bank Negara Indonesia (BBNI IJ/BUY/Rp5,325/Target: Rp6,560) Aspires to book 20% ROE in 2028. MALAYSIA Asian Gems Corporate Hi...
Beijing becomes the last tier 1 city to announce the relaxation of HPRs but saw the strongest sales rebound. We expect recovery of sales volume in the following month, driven by relaxation of HPRs in tier 1 cities. The strength of the recovery is yet to be tested. Maintain MARKET WEIGHT. Despite a cautious view on fundamentals, we do think improved liquidity and support in the stock market will positively drive valuation. Raise target prices of CR Land/COLI/Longfor on higher multiples. CR Land r...
Industry fundamentals continue to deteriorate in Sep 24, with sales momentum in the primary and secondary markets further weakened and listing price in a downward trend. There is some talk of destocking policies but little action. The trough valuation has priced in all the negatives. Potential monetary easing may accelerate SOEs’ destocking progress and resolve risks. Maintain MARKET WEIGHT on the sector. Our top pick is CR Land, which is trading at a 2024 yield of 7.2%.
GREATER CHINA Strategy Small-Mid Cap Monthly Solid growth momentum into 8M24, reiterate BUY on Plover Bay Technologies and raise target price to HK$6.10. Sector Property Trough valuation has priced in the weak industry fundamentals and poor policy implementation; poised for potential monetary easing. INDONESIA Update Erajaya Swasembada (ERAA IJ/BUY/Rp458/...
GREATER CHINA Strategy Alpha Picks: September Conviction Calls: We expect an improving operating performance among selected companies in September, and add AIA, COLI, Desay SV, Galaxy Entertainment, Meituan, Ping An and TUL to our BUY list and add Li Auto as a SELL. INDONESIA Strategy Alpha Picks: Trailing The JCI’s Strong Performance In Aug 24: Our picks are ICBP, TOWR, BBNI, BMRI, BBRI, EXCL, CTRA, BBTN, CMRY, SIDO and JSMR. MALAYSIA Strategy Alpha Picks: Adapting To A Bipolar Market: Our Al...
CR Land’s 1H24 core profit declined 4.7% yoy and was equivalent to 41% of our annual estimate, in line with expectations and mainly benefitted from the steady growth of the recurring business. Though gross profit margin for DP may be lowered to 10-15% (vs 20.7% in 2023), CR Land continues to target stable core net profit in 2024, driven by 10% rental growth in malls. We trim our 2025/26 earnings forecast by 3.4%/7.7% respectively and lower SOTP-derived target price by 12% to HK$32.86. Maintain B...
KEY HIGHLIGHTS Results Anhui Conch Cement (914 HK/BUY/HK$16.46/Target: HK$19.50) Anhui Conch reported 1H24 earnings of Rmb3,325.6m (-48.6% yoy), representing 29% of our full-year estimate and below expectations. Gross margin for self-produced products fell to 23.0% (-4.6ppt yoy). The slump in cement ASP of 21.6% was steeper than the 16.0% reduction in cement’s unit production cost. 1H24 cement and clinker sales volume declined to 126m tonnes (-3.4% yoy), and management expects 2024 demand to...
GREATER CHINA Strategy Alpha Picks: August Conviction Calls: We expect stimulus to be announced in August and add COSCO Shipping Ports, Haier Smart Home, and KE Holdings to our BUY list and add SELL call on WuXi Bio, and XPeng. INDONESIA Strategy Alpha Picks: Underperformance in Jul 24: Our picks are BBNI, BMRI, BBRI, EXCL, CTRA, BBTN, CMRY, SIDO and JSMR. MALAYSIA Strategy Alpha Picks: Raising The M&A And Monetisation Bets: Our Alpha Picks marginally beat the KLCI. Jul 24 picks: Ekovest, Gamu...
With an accelerated decline of national property prices in 1H24 and the weakening of national retail sales in Jun 24, developers’ margin is under pressure. We had channel checks with CR Land/COLI/Longfor and trim our earnings estimate and target price. Maintain MARKET WEIGHT on China’s property sector. CR Land remains our top pick.
The comprehensive reform plans released on 21 July point to two key trends in the next five years: a) government housing makes a much higher contribution to housing supply, and b) the private residential sector will contract in size but improve in quality. The future looks rosy but the road to the new model is not a smooth one, with a possible change of the pre-sale regime and potential introduction of the property holding tax. Maintain MARKET WEIGHT. Top pick: CR Land.
For the mainland market, despite the marginal recovery of key indicators in June, the accelerated decline in property prices in 1H24 is weighing on developers’ margins. Top pick is CR Land for its defensiveness of margins thanks to strong recurring income. For Hong Kong, the daily average number of mainland tourists to Hong Kong and Hong Kong residents going northwards rose 22% and fell 7.8% mom in July. The upcoming rate cut will support the valuations of Hong Kong retail landlords. Top pick: L...
GREATER CHINA Economics Economic Activity 2Q24 growth below expectations. Strategy China And Hong Kong Property Sharper property price decline in 1H24 weighing on margins of Chinese developers; upcoming interest rate cut to support value of Hong Kong retail landlords. Update Kingmed Diagnostics (603882 CH/BUY/Rmb38.10/Target: Rmb35.00) 1H24 and 2024 results under pressu...
In Shanghai, the secondary market saw volume rebound. The transaction volume of oldsmall apartments within the outer rings of Shanghai increased significantly due to higher purchase demand after policy easing. The new home market is recovering but is weaker than the secondary home market. However, there are rising doubts about the sustainability of sales recovery. Maintain MARKET WEIGHT. Top picks: CR Land and Longfor.
GREATER CHINA Strategy Alpha Picks: July Conviction Call: Adding ASMPT, Innovent, Poly Property Services, TAL Education and Trip.com to our BUY list; hedging with SELL call on BYD. INDONESIA Strategy Alpha Picks: Outperformance In Jun 24 And 2Q24: Our picks are BMRI, BBRI, EXCL, BSDE, TLKM, ACES, BBTN, CMRY, SIDO and JSMR. MALAYSIA Strategy Alpha Picks: Opting For More Adventurous Choices: Our Alpha Picks beat the KLCI again. Jul 24 picks: BURSA, Ekovest, Gamuda, Lagenda, Mah Sing, MYEG, Pekat...
For the mainland property market: a) both new and secondary home sales in core cities improved, and b) SOEs saw sales rebound in Jun 24. For Hong Kong’s property market: a) it entered the low sales season, b) approval of automatic land lease renewal marginally improved buyer sentiment, and c) an increase in the duty-free quota was below expectations. Maintain MARKET WEIGHT on the China and Hong Kong property sectors. Downgrade the Hong Kong landlord sector to MARKET WEIGHT. Prefer the China prop...
KEY HIGHLIGHTS Economics PMI: Manufacturing PMI below 50% for a second month. Strategy China And Hong Kong Property: Major SOE developers saw sales rebound in June; policy support for Hong Kong tourism weaker-than-expected. Sector Macau Gaming: Jun 24 GGR down 12% mom, missing expectations. HSI AND HS TECH INDEX OUTLOOK
GREATER CHINA Economics PMI Manufacturing PMI below 50% for a second month. Strategy China And Hong Kong Property Major SOE developers saw sales rebound in June; policy support for Hong Kong tourism weaker-than-expected. Sector Macau Gaming Jun 24 GGR down 12% mom, missing expectations. INDONESIA Results Vale In...
For the mainland property market: a) new home sales in core cities improved wow but fell yoy, b) second-hand home sales in Tier 1 cities continued to rebound, and c) signs of stabilisation of listing prices seen in some Tier 2 cities. For Hong Kong’s property market: a) primary sales in June were weaker than expected, and b) SHKP’s NOVO Land is a highlight. Maintain MARKET WEIGHT on both sectors. Prefer Hong Kong developers to China developers for their stronger fundamentals and attractive valua...
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