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1、 DISCLOSURE APPENDIX CONTAINS ANALYST CERTIFICATIONS AND THE STATUS OF NON-US ANALYSTS. FOR OTHER IMPORTANT DISCLOSURES, visit www.credit- researchdisclosures or call +1 (877) 291-2683. U.S. Disclosure: Credit Suisse does and seeks to do business with companies covered in its research reports. As a
2、result, 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. 05 December 2011 Asia Pacific/China Equity Research Real Estate China P
3、roperty Sector THEME Short-term gain? Long-term pain Figure 1: Primary markets falling share exacerbates housing over-supply 0% 10% 20% 30% 40% 50% 60% 70% 80% 200520062007200820092010 BeijingShenzhenGuangzhouShanghai Source: Centaline, Soufun Homebuyer sentiment should remain weak amid economic unc
4、ertainties. Due to the reasons below, we believe the current “fine- tuning” policy may only prolong the sectors down cycle, even though a rally within the next three months is possible. We believe only a significantly worsened economy can trigger a direct loosening on the China property sector; ther
5、efore, any boost to homebuyer confidence would be limited. For now, we expect potential credit easing to reduce developers bankruptcy risks, but cash flow pressure should remain. Consensus severely underestimates future housing supply. Many popular supply/demand models implicitly assume homebuyers w
6、ill never sell vacant units. Ministry of Housing data indicates that developers existing land banks can produce almost 100 mn new housing units. Our calculation shows that some potential resale of vacant units plus developers existing land banks should already be enough to satisfy 10 to 20 years hou
7、sing demand. 2012 assumptions and stock calls. We expect Chinas housing prices to fall by 20% from the peak in mid-2011 to the end of 2012E, with no significant boost in transaction volume. Therefore, we revise the earnings estimates and target prices of our coverage universe. Maintain UNDERWEIGHT o
8、n China Property Sector. If credit easing continues, we expects stocks with deep discount NAV partially due to bankruptcy concerns, such as Evergrande, KWG and Glorious, to rebound more than peers. Research Analysts Jinsong Du 852 2101 6589 jinsong.ducredit- Wenhan Chen 852 2101 6407 wenhan.chencred
9、it- Duo Chen 852 2101 7350 duo.chencredit- 05 December 2011 China Property Sector 2 Focus chart and tables Figure 2: Responses to property price expectations 1 4 % 5 0 % 4 5 % 1 4 % 1 8 % 5 3 % 3 6 % 4 3 % 1 2 % 5 1 % 3 5 % 5 3 % 2 9 % 3 6 % 1 1 % 0 % 1 0 % 2 0 % 3 0 % 4 0 % 5 0 % 6 0 % I n cre a se
10、D e cre a seF la t Ju n eJu lyA u g u stS e p t e m b e rO ct o b e r Source: Credit Suisse Chinese Whispers Survey Figure 3: How many years of demand can be satisfied by the current available supply Resale ratio Annual demand Total supply years of demand can be satisfied 10% 11.61 109.28 9 20% 11.6
11、1 120.50 10 30% 11.61 133.27 11 40% 11.61 147.95 13 50% 11.61 164.98 14 60% 11.61 185.00 16 70% 11.61 208.84 18 80% 11.61 237.75 20 Source: Company data, Credit Suisse estimates Figure 4: Credit Suisse China property valuation summary (as of 5 Dec) RIC Name Rating Share price Target price +/- Mkt ca
12、p 12 mth NAV (Disc)/p rem. P/E Div. yld (%) P/B Net gearing (HK$) (HK$) (%) (US$ bn) (HK$/shr) (%) FY10 FY11E FY12E FY10A FY10A FY11E (%) 3383.HK Agile N 6.92 7.10 3 3.1 12.9 (46) 5.6 4.7 4.8 5.8 1.10 66 000002.SZ Vanke A (Rmb) O 7.29 10.00 37 11.1 11.1 (34) 11.9 8.7 7.8 1.5 1.81 15 0688.HK COLI U 1
13、4.92 11.20 -25 15.7 13.2 13 13.2 10.4 10.1 2.1 2.23 34 1109.HK CR Land N 12.72 12.30 -3 9.5 17.6 (28) 15.0 13.9 13.5 2.9 1.49 63 3333.HK Evergrande O 3.49 5.10 46 6.7 7.3 (52) 9.0 5.0 4.9 4.2 2.17 43 0845.HK Glorious O 1.34 2.05 53 1.3 3.7 (64) 6.8 3.8 3.2 0.0 0.60 71 3900.HK Greentown U 3.75 3.60 -
14、4 0.8 12.0 (69) 3.4 2.7 1.9 9.5 0.51 189 2777.HK GZ R therefore, any boost to homebuyer confidence would be limited. We also expect potential loosening, if any, to start with lowered first-home mortgage premiums over basis rates, the impact of which should also be limited. Credit Suisse Chinese Whis
15、pers Survey shows home buyers sentiment kept weakening during the past few months. Without a direct boost to home buyers sentiment, we expect developers contracted sales to stay weak. Consensus severely underestimates future housing supply Investor feedback shows that a lot of housing supply/demand
16、analysis has ignored the increasing trend in secondary housing market share, thereby underestimating the total housing supply and over-estimating the mid- to long-term demand for primary housing in China. Ministry of Housing data indicates that up to November 2011, developers total land banks can pr
17、oduce almost 100 mn new housing units. Even if annual primary housing sales continue at a historical high of 9 mn units, developers existing land banks can already satisfy ten years demand. Many popular supply/demand models implicitly assume homebuyers will never sell vacant units. Our calculation s
18、hows that some potential resale of vacant units plus developers existing land banks should already be enough to satisfy 10 to 20 years housing demand. Margin downside is more significant than consensus Our case study on a developer shows that on a cash basis, a 10% ASP decline is expected to lead to
19、 a 28% profit decline, while a 15% ASP decline should lead to a 42% profit decline. Therefore, current consensus margin and NAV estimates are too high, in our view. 2012 assumptions and stock calls We expect Chinas housing prices to fall another 10% YoY in 2012E, after a 10% fall in 2011E, with no s
20、ignificant boost in transaction volume. Therefore, we revise the earnings estimates and target prices of our coverage universe. Maintain UNDERWEIGHT on the China Property Sector. If credit easing continues, we expects stocks with deep discount NAV partially due to bankruptcy concerns, such as Evergr
21、ande, KWG and Glorious, to rebound more than peers. Homebuyer sentiment to remain weak amid economic uncertainties Even if annual primary housing sales continue at a historical high of 9 mn units, developers existing land banks can already satisfy ten years demand. Some potential resale of vacant un
22、its plus developers existing land banks should already be enough to satisfy 10 to 20 years housing demand. We expect Chinas housing prices to fall another 10% YoY in 2012E, after a 10% fall in 2011E, with no significant boost in transaction volume. 05 December 2011 China Property Sector 4 Home buyer
23、s sentiment to remain weak We believe only a significantly worsened economy can trigger a direct loosening on China property sector; therefore, any boost to homebuyer confidence would be limited. We also expect potential loosening, if any, to start with lowered first-home mortgage premiums over basi
24、s rates, the impact of which should also be limited. Figure 5: RRR changes versus home mortgage rates Effective date Large financial institutions RRR Small to medium financial institution First-home mortgages maximum premium to basis rate 12/5/2011 21.0% 17.5% 20% 6/20/2011 21.5% 18.0% 20% 5/18/2011
25、 21.0% 17.5% 20% 4/21/2011 20.5% 17.0% 20% 3/25/2011 20.0% 16.5% 10% 2/24/2011 19.5% 16.0% 10% 1/20/2011 19.0% 15.5% 0% Source: Company data Credit Suisse Chinese Whispers Survey shows that home buyers sentiment keeps weakening during the past few months. Without a direct boost to home buyers sentim
26、ent, we expect developers contracted sales to stay weak. Figure 6: At what level of price fall do they consider buying an additional property? Figure 7: Responses to property price expectations 4% 8%8% 22% 16% 13% 31% 0% 5% 10% 15% 20% 25% 30% 35% less than 10% 10-15%15-20%20-30%30-50% over 50%will
27、not 14% 50% 45% 14% 18% 53% 36% 43% 12% 51% 35% 53% 29% 36% 11% 0% 10% 20% 30% 40% 50% 60% IncreaseDecreaseFlat JuneJulyAugustSeptemberOctober Source: Credit Suisse Chinese Whispers Survey Source: Credit Suisse Chinese Whispers Survey Figure 8: Responses to property pricesbreakdown of the sample, by
28、 age Figure 9: Responses to property pricesbreakdown of the sample, by city tier 10% 54% 36% 11% 56% 33% 13% 42% 45% 0% 10% 20% 30% 40% 50% 60% IncreaseDecreaseFlat Age 18-29Age 30-45Age 46-65 5% 63% 32% 14% 49% 37% 11% 53% 36% 0% 10% 20% 30% 40% 50% 60% 70% IncreaseDecreaseFlat Tier 1Tier 2Tier 3 S
29、ource: Credit Suisse Chinese Whispers Survey Source: Credit Suisse Chinese Whispers Survey Credit Suisse Chinese Whispers Survey shows that home buyers sentiment keeps weakening during the past few months. 05 December 2011 China Property Sector 5 Consensus underestimates future housing supply Invest
30、or feedback shows that a lot of housing supply/demand analysis has ignored the increasing trend in secondary housing market shareand therefore underestimated the total housing supply and overestimated the mid- to long-term demand for primary housing in China. Ministry of Housing data implies that up
31、 to November 2011, developers total land banks can produce almost 100 mn new housing units. If the annual primary housing sales can continue to be at the historical high of 9 mn units, developers existing land banks can already satisfy ten years demand. Many popular supply/demand models implicitly a
32、ssume homebuyers will never sell vacant units. Our calculation shows that some potential re-sales of vacant units plus developers existing land banks should already be enough to satisfy 10 to 20 years housing demand. Since our view is housing over-supply, so our principle of estimation is to being c
33、onservative in estimating supply, and aggressive in estimating demand Current urban residential housing stock: 14.5 bn sq m, 186 mn units 14.5 bn sq m urban residential GFA Many people calculate the total urban residential GFA by using per-capita urban residential GFA (reported by the MOHURD-Ministr
34、y of Housing and Urban Rural Development ) multiplied by the urban population, thus over-estimate the existing housing stock. The correct method is to use the non-agricultural population (people that hold urban hukou and totalling 459 mn as of 2010) instead of urban population (people that reside in
35、 the urban areas totalling 670 mn as of 2010). Based on this calculation, the total current urban residential housing stock is around 14.5 bn sq m as of 2010. We compare our estimates with the actual numbers reported by MOHURD from 2002-05 (no longer reported since 2006) and find the difference is v
36、ery small, as shown in the table below. Therefore, we believe our estimate of 14.5 bn sq m current urban residential housing stock is relatively accurate. Figure 10: Calculating the total urban residential GFA 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Actual Per capita urban residential
37、 GFA sq m 20.3 20.8 22.8 23.7 25.0 26.1 27.1 28.0 28.3 30.0 31.6 Actual Non-agricultural population mn 305 332 349 374 391 409 421 431 440 450 459 Estimate Total urban residential GFA mn sq m 6,178 6,906 7,962 8,870 9,785 10,674 11,401 12,061 12,444 13,509 14,514 Actual Total urban residential GFA m
38、n sq m 8,185 8,911 9,616 10,769 CHECK Total urban residential GFA % -2.7 0.5 1.8 -0.9 Source: NBS, CEIC, MOHURD, Credit Suisse estimates 186 mn units of urban residential houses as of 2010 To calculate the current total number of urban residential houses, we first calculate the number of residential
39、 houses in 2005 using data provided by MOHURD (no longer reported since 2006), then we add the newly-increased houses from 2006 to 2010 to get the current total number of urban residential houses. Even if annual primary housing sales continue at a historical high of 9mn units, developers existing la
40、nd banks can already satisfy ten years demand. Some potential resale of vacant units plus developers existing land banks should already be enough to satisfy 10 to 20 years housing demand. The total current urban residential housing stock is around 14.5 bn sq m as of 2010. 05 December 2011 China Prop
41、erty Sector 6 Figure 11: 152 mn urban residential houses as of 2005 2003 2004 2005 Actual Total urban residential GFA mn sq m 8,911 9,616 10,769 Actual Average GFA per household sq m 77 79 83 Estimate No. of non-agricultural households mn 115 121 129 Actual Average No. of packaged urban residential
42、houses per household units 0.83 0.84 0.85 Estimate No. of packaged urban residential houses Mn 96 102 110 Actual Urban residential package rate % 79 82 81 Estimate Packaged urban residential GFA mn sq m 7,040 7,927 8,684 Estimate Un-packaged urban residential GFA mn sq m 1,871 1,689 2,085 Assumption
43、 Average GFA per un-packaged residential house sq m 50 Estimate No. of un-packaged urban residential houses mn units 42 Estimate No. of urban residential houses as of 2005 mn units 151.7 * Packaged house has its own bathroom and kitchen, etc., while an unpackaged one usually shares the bathroom and
44、kitchen on the same floor Source: NBS, CEIC, MOHURD, Credit Suisse estimates We take 2005 as an example to explain our calculation in the table above: 110 mn packaged urban residential houses as of 2005 Formulas used are: (a) No. of non-agricultural households (129 mn)=Total urban residential GFA (1
45、0,769 mn sq m)/ Average GFA per household (83 sq m) (b) No. of packaged urban residential houses (110 mn)=No. of non-agricultural households (129 mn)* Average No. of packaged urban residential houses per household (0.85) 42 mn unpackaged urban residential houses as of 2005 Formulas used are: (c) Pac
46、kaged urban residential GFA (8,684 mn sq m)=Total urban residential GFA (10,769 mn sq m) * Urban residential package rate (81%) (d) Un-packaged urban residential GFA (2,085 mn sq m)=Total urban residential GFA (10,769 mn sq m) -Packaged urban residential GFA (8,684 mn sq m) (e) No. of un-packaged ur
47、ban residential houses (42 mn)= Un-packaged urban residential GFA (2,085 mn sq m)/ Average GFA per un-packaged residential house (50 sq m) 152 mn urban residential houses as of 2005 The formula used is: (f) No. of urban residential houses (152 mn)= No. of packaged urban residential houses (110 mn)+N
48、o. of un-packaged urban residential houses (42 mn) 186 mn urban residential houses as of 2010 Figure 12: 186 mn urban residential houses as of 2010 2005 2006 2007 2008 2009 2010 Estimate Total urban residential GFA mn sq m 10,769 11,401 12,061 12,444 13,509 14,514 Estimate Net increased residential GFA mn sq m 632 660 382 1,065 1,005 CEIC* Average size of newly built/net-increased urban houses sq m/unit 114 113 110 107 102 Estimate No. of net-increased houses each year mn 6 6 3 10 10 Estimate Newly added no. of houses from 2006-10 mn 34.7 Estimate No. of urban residential houses as