中国房地产行业：2018年市场放缓中盘整加速（英文版）.pdf

Deutsche Bank Markets Research Asia China Property Property Industry China Property Date 1 February 2018 Recommendation Change Accelerating consolidation amid slower market in 2018 Accelerating consolidation amid slower physical market _ Deutsche Bank AG/Hong Kong Deutsche Bank does and seeks to do business with companies covered in its research reports. Thus, investors should be aware that the firm may have a conflict of interest that could affect the objectivity of this report. Investors should consider this report as only a single factor in making their investment decision. DISCLOSURES AND ANALYST CERTIFICATIONS ARE LOCATED IN APPENDIX 1. MCI (P) 083/04/2017. Jeffrey Gao, CFA Research Analyst (+852 ) 2203 6256 jeffrey.gaodb Jason Ching, CFA Research Analyst (+852 ) 2203 6205 jason.chingdb Stephen Cheung, CFA Research Analyst (+852 ) 2203 6182 stephen-a.cheungdb Foo Leung Research Associate (+852 ) 2203 6239 foo.leungdb Key Changes Company Target Price Rating 3383.HK 9.40 to 16.08(HKD) Hold to Buy 3883.HK 7.00 to 8.40(HKD) - 0817.HK 3.81 to 5.63(HKD) - 1966.HK 4.57 to 5.23(HKD) - 0884.HK 4.82 to 7.99(HKD) - 0688.HK 30.63 to 34.91(HKD) - 2007.HK 18.12 to 19.93(HKD) - 1109.HK 27.11 to 37.01(HKD) - 3333.HK 26.55 to 30.11(HKD) - 1030.HK 8.26 to 8.88(HKD) - 600383.SS 10.06 to 13.10(CNY) - 3900.HK 9.13 to 14.09(HKD) - 2777.HK 19.69 to 25.92(HKD) - 1813.HK 12.88 to 15.48(HKD) - 3380.HK 10.95 to 13.15(HKD) - 0960.HK 23.17 to 30.29(HKD) - 600823.SS 4.55 to 5.20(CNY) - 0813.HK 19.10 to 27.58(HKD) - 3377.HK 5.27 to 6.83(HKD) Buy to Hold 1918.HK 46.00 to 46.52(HKD) - 2202.HK 41.38 to 45.24(HKD) - 000002.SZ 34.53 to 37.65(CNY) - Source: Deutsche Bank For 2018, we expect a slower physical market after record high property sales (including retail and office spaces) of 1.7bn sqm last year. We expect marginal policy relaxation with relatively tighter credit in 2018 versus that of 2017. However, we remain constructive on listed developers in view of the accelerating market consolidation. With diversified financing channels, rich saleable resources and strong execution, we estimate listed developers will deliver strong sales growth of 35% in 2018F. We like developers with rich land bank/resources in high-tier cites and high-growth national players with strong execution in low-tier markets. Physical market might slow in 2018F sales volume to decrease by 5% We are relatively conservative on the physical market in 2018. We expect: 1) national property sales volume to decline by 5% y-y due to high base (+7.7% y-y in 2017) and tight credit (average first-home mortgage rate increased to 5.4% at end-2017 from 4.5% in 2016/higher borrowing cost for developers); 2) property prices to grow moderately due to stringent price control but low inventory levels (11/9/11 months in T1/2/3 cities), and hence, resulting in low single-digit decline for national property sales value; and 3) REI to continue to grow at 5-7% on further land sales recovery, and improving new starts. Accelerating market consolidation; sales of listcos to grow 35% in 2018F We think market consolidation will continue to be the key trend in 2018. We expect the top-20 developers will have 50% market share of primary property sales by 2020F (vs. 32.5% in 2017) due to their: 1) superior financing channels (average financing cost lowered to 5.3% in 1H17 from 7-8.5% in 2012-2015); 2) more competitiveness in the primary land market and M&As (land acquisition of major developers increased 132% by volume on average in 2017); and 3) better execution and brand equity. Low-tier market players might continue to outperform in sales growth While we agree that overall sales volume in low-tier cities could retreat from high base in 2018, we think listed low-tier markets players will continue to outperform in sales (vs. T1/2 focused players) as we see less competition in this fragmented market. Dominant players like Country Garden can easily gain market share in T3/4 cities. On the contrary, competition in T1 and high T2 markets will remain fierce and it will be difficult for major players to gain market share, despite high-tier markets recovering gradually from low base. We favor high-growth national players and strong regional names with rich saleable resources Overall, we remain positive on the sector on a 12-month horizon, given listed developers strong sales growth of 35% in 2018 and earnings CAGR of 25% for FY17-19F. We change our NAV discount applied to the sector/stocks to reflect the positive growth prospects and improving balance sheets. We expect more divergence in listcos performance, due to their different strategies and execution. We suggest investors accumulate names with strong execution records or abundant saleable resources in high-tier cities, including Country Garden, Vanke, Future Land, Aoyuan, Logan, and KWG. We value stocks using NAV for existing projects. Key risks are further credit/policy tightening. Distributed on: 31/01/2018 22:00:00 GMT7T2se3r0Ot6kwoPa1 February 2018 Property China Property Page 2 Deutsche Bank AG/Hong Kong 2018 outlook consolidation accelerating amid slower market Property sales volume to decline by 5% Thanks to the strong property sales in low-tier cities (+13.9% y-y by volume and +27.7% y-y by value, accounting for 64% of national sales by volume and 48% by value), national property sales have reached another historical high of 1.7bn sqm (+7.7% y-y) and RMB13.4tr (+13.7% y-y) in 2017. We expect property sales volume to decline by about 5% y-y in 2018, considering: 1) relatively tighter credit (average mortgage rate of 5.4% for first-home in 2017, vs. 4.5% in 2016, and increasing borrowing costs for developers); 2) the shanty town redevelopment target to lower to 5.8mn units (vs. 6mn units in 2017); and 3) last years high base. Figure 1: National property sales volume Figure 2: National property sales value 22% 20%29%19%46%9%26%- 19%53%10%5%1%17%- 8%7%22%8%-30%-20 %-10%0%10%20%30%40%50%60%-20 040060080 01, 0001, 2001, 4001, 6001,8002001 2003 2005 2007 2009 2011 2013 2015 2017( mn sqm)ThousandsT o tal G F A s o l d ( L H S ) Y o Y g ro w th ( R H S )29%24%34% 35%74%13%44%- 19%83%19%13% 9%26%- 6%14%35%14%-40%-20%0%20%40%60%80%100%-2, 0004, 0006, 0008,00010 ,00012, 00014, 00016, 0002001 2003 2005 2007 2009 2011 2013 2015 2017( R M B b n ) T o tal p ro p e rt y s ale s ( L H S )Y o Y g ro w th ( R H S )Source: CEIC, Deutsche Bank Source: CEIC, Deutsche Bank 1 February 2018 Property China Property Deutsche Bank AG/Hong Kong Page 3 Figure 3: National residential property sales volume Figure 4: National residential property sales value 22%20%29%19%47%9%27%- 19%54%8%4%1%18%- 9%7%22%5%-30%-20%-10%0%10%20%30%40%50%60%-20040060 080 01,0001, 2001, 4001, 6002001 2003 2005 2007 2009 2011 2013 2015 2017( mn sqm) Re s i d e n ti al G F A s o l d (L HS ) Y o Y g r o w th ( RH S )29%23%34% 37%74%14%49%- 19%87%15%11% 10%27%- 8%17%36%11%-40%-20%0%20%40%60%80%100%-2, 0004, 0006, 0008, 00010, 00012, 0002001 2003 2005 2007 2009 2011 2013 2015 2017( R M B b n ) Re s i d e n ti al p r o p e r ty s al e s (L H S )Y o Y g ro w th ( R H S )Source: CEIC, Deutsche Bank Source: CEIC, Deutsche Bank Figure 5: Average mortgage rate Figure 6: Shanty town redevelopment -1.02.03.04.05.06.07.08.0Jan-14Apr-14Jul-14Oct-14Jan-15Apr-15Jul-15Oct-15Jan-16Apr-16Jul-16Oct-16Jan-17Apr-17Jul-17Oct-17(% ) 1s t h o m e m o rtga ge2n d h o m e m o rtga ge3.24.76.0 6.0 6.05.80.01.02.03.04.05.06.07.02013 2014 2015 2016 2017E 2018E(m n u n i ts)Source: Rong360, Deutsche Bank Source: MOHURD, Deutsche Bank Property prices to grow moderately amid low inventory but tight credit Under governments stringent property price control on new launches, ASPs in 100 major cities only increased 7.1% y-y, and 3.9% y-y in the top-10 cities in 2017 (vs. 19% and 22% in 2016), according to CREIS. We expect property prices will grow in low single-digits in 2018, considering: 1) Low inventory level: inventory levels reached 11/9/11 months in T1/2/3 cities by December, and we believe inventory is unlikely to pick up in the short term due to low land sales volume (national land sales volume in 2017 was 24-38% below 2011-2014 level) 2) Policy and credit remain tight: we expect there will only be marginal policy relaxation this year, while credit will be relatively tighter (average mortgage rate increased to 5.4% for first-home buyers and 5.7% for second-home in 2017, vs. 4.5% and 5.4% in 2016). 1 February 2018 Property China Property Page 4 Deutsche Bank AG/Hong Kong Figure 7: ASPs of major 100 cities Figure 8: ASPs of top-10 cities 8,0009,00010,00011,00012,00013,00014,00015,000Mar-11Jul-11Nov-11Mar-12Jul-12Nov-12Mar-13Jul-13Nov-13Mar-14Jul-14Nov-14Mar-15Jul-15Nov-15Mar-16Jul-16Nov-16Mar-17Jul-17Nov-17( R M B/ sq m)10,00012,00014,00016,00018,00020,00022,00024, 00026,00028,000Mar-11Jul-11Nov-11Mar-12Jul-12Nov-12Mar-13Jul-13Nov-13Mar-14Jul-14Nov-14Mar-15Jul-15Nov-15Mar-16Jul-16Nov-16Mar-17Jul-17Nov-17( R M B/ sqm)Source: CREIS, Deutsche Bank Source: CREIS, Deutsche Bank Figure 9: Inventory months in T1 cities (4 cities) Figure 10: Absolute inventory in T1 cities (4 cities) 11.0 10.1 02468101214161820Jan-10Jul-10Jan-11Jul-11Jan-12Jul-12Jan-13Jul-13Jan-14Jul-14Jan-15Jul-15Jan-16Jul-16Jan-17Jul-17( mo n th )051015202530354045Jan-10Jul-10Jan-11Jul-11Jan-12Jul-12Jan-13Jul-13Jan-14Jul-14Jan-15Jul-15Jan-16Jul-16Jan-17Jul-17( mn sq m)Source: CREIS,CRIC, Deutsche Bank Source: CREIS, CRIC, Deutsche Bank 1 February 2018 Property China Property Deutsche Bank AG/Hong Kong Page 5 Figure 11: Inventory months in T2 cities (28 cities) Figure 12: Absolute inventory in T2 cities (28 cities) 9.1 13.0 02468101214161820Jan-10Jul-10Jan-11Jul-11Jan-12Jul-12Jan-13Jul-13Jan-14Jul-14Jan-15Jul-15Jan-16Jul-16Jan-17Jul-17( mo n th )050100150200250300350Jan-10Jul-10Jan-11Jul-11Jan-12Jul-12Jan-13Jul-13Jan-14Jul-14Jan-15Jul-15Jan-16Jul-16Jan-17Jul-17( mn sq m)Source: CREIS, CRIC, Deutsche Bank Source: CREIS, CRIC, Deutsche Bank Figure 13: Inventory months in T3 cities (44 cities) Figure 14: Absolute inventory in T3 cities (44 cities) 10.9 17.5 051015202530Jan-12Jun-12Nov-12Apr-13Sep-13Feb-14Jul-14Dec-14May-15 Oct-15Mar-16Aug-16Jan-17Jun-17Nov-17( mo n th )050100150200250Jan-12Jun-12Nov-12Apr-13Sep-13Feb-14Jul-14Dec-14May-15 Oct-15Mar-16Aug-16Jan-17Jun-17Nov-17( mn sq m)Source: CREIS, CRIC, Deutsche Bank Source: CREIS, CRIC, Deutsche Bank Figure 15: Average mortgage rate Figure 16: M2 growth -1.02.03.04.05.06.07.08.0Jan-14Apr-14Jul-14Oct-14Jan-15Apr-15Jul-15Oct-15Jan-16Apr-16Jul-16Oct-16Jan-17Apr-17Jul-17Oct-17(% ) 1s t h o m e m o rtga ge2n d h o m e m o rtga ge0%5%10%15%20%25%30%2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017Source: Rong360, Deutsche Bank Source: CEIC, Deutsche Bank 1 February 2018 Property China Property Page 6 Deutsche Bank AG/Hong Kong Real estate investment to grow at 5% Thanks to the recovery of land sales (+15.8% by volume and +49.4% by value in 2017), the decent growth of new starts (+7.0% in 2017) and the increase of commodity prices, the national real estate investment reached another historical high of RMB11.0tr (+7.0% y-y) in 2017. We expect national real estate investment will grow at 5-7% in 2018E, based on: 1) new starts grew 7.0% y-y in 2017 and will continue to grow 3-5% on the back of land sales rebounded in 2017; 2) GFA under-construction grew 3.0% y-y in 2017; and 3) primary land sales to continue to grow with inventory level lowered to 11/9/11 months in T1/2/3 cities. Figure 17: National real estate investment Figure 18: YTD real estate investment growth 27%24%31% 30%20%23%30%21%18%33%28%16%20%10%1%7% 7%0%5%10%15%20%25%30%35%-246810122000 2002 2004 2006 2008 2010 2012 2014 2016( R M B tr n ) T o tal R E I ( L H S ) y-y gr o w t h ( R H S )0%5%10%15%20%25%30%35%40%45%Jan-08Jul-08Jan-09Jul-09Jan-10Jul-10Jan-11Jul-11Jan-12Jul-12Jan-13Jul-13Jan-14Jul-14Jan-15Jul-15Jan-16Jul-16Jan-17Jul-17T o tal R E I gr o w thRe s i d e n ti al RE I g r o w thSource: CEIC, Deutsche Bank Source: CEIC, Deutsche Bank Figure 19: National commodity property new starts Figure 20: National residential property new starts 27%18%29%11% 11%17%21%3%18%42%16%- 7%13%- 11%- 14%8% 7%-20%-10%0%10%20%30%40%50%05001,0001,5002,0002,5002001 2003 2005 2007 2009 2011 2013 2015 2017( mn sqm)T o tal n e w s tar ts ( L H S )Y o Y g ro w th ( R H S )26%17%28%10%13%18%23%2%16%40%13%- 11%12%- 14% - 15%9% 11%-20%-10%0%10%20%30%40%50%02004006008001,0001,2001,4001,6002001 2003 2005 2007 2009 2011 2013 2015 2017( mn sqm)Re s i d e n ti al n e w s tar ts (L H S )Y o Y g r o w th ( RH S )Source: CEIC, Deutsche Bank Source: CEIC, Deutsche Bank 1 February 2018 Property China Property Deutsche Bank AG/Hong Kong Page 7 Figure 21: National land sales volume Figure 22: National land sales value 42% 40%22%8%- 4% - 4%10%- 9%- 13%28%0%- 13%9%- 14%- 32%- 3%16%-40%-30%-20 %-10%0%10%20%30%40%50%-5010 015020025 030035040 04502000 2002 2004 2006 2008 2010 2012 2014 2016( mn sqm) L a n d s ale s vo l u me ( L H S )Y o Y g r o w th ( RH S )- 2%28%25%7% 6%60%8%- 17%34%1%- 24%20%49%-30%-20%-10 %0%10%20%30%40%50%60%70%-20040060 08001, 0001, 2001, 4001,6002005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017( RM B bn) L a n d s ale s valu e ( L H S ) Y o Y g ro w th ( R H S )Source: CEIC, Deutsche Bank Source: CEIC, Deutsche Bank 1 February 2018 Property China Property Page 8 Deutsche Bank AG/Hong Kong Consolidation to continue in an overall healthy market Listed developers to gain market share Based on our demographic analysis published earlier (A deep-dive into demographics; healthy demand ahead), we believe demand in China will be sustained at a high level of 1.5-1.6bn sqm of annual primary market sales (including residential and commercial properties) over the next 3-5 years, and we continue to believe that listed developers will be the main beneficiaries. We believe the top-20 developers will have 50% market share of primary property sales by 2020F (vs. 32.5% in 2017, implying a more than 20% sales CAGR) due to: Better financing channels for large developers We think large developers are less vulnerable to the current credit tightening environment, given their diverse financing channels (including offshore bonds, domestic corporate bonds, medium-term notes, trust loans). Also, in terms of mortgage loans, large developers can secure a mortgage quota with banks ahead of project launches to improve their cash flow, hardly an option for small developers. We expect the average financing cost of major listed developers will trend up slightly in 2018 but remain relatively cheap at below 6%, which would still be way below the 7-8.5% between 2012 and 2015. Large developer