j.p. 摩根-中国-房地产行业-中国房地产：尽善尽美-2017.9.25-jpmorgan-china property sector as good as it gets

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1、Completed24Sep201704:09PMHKTDisseminated25Sep201707:00AMHKTAsiaPacificCreditResearch25September2017ChinapropertysectorAsgoodasitgetsRidingonthestrongphysicalmarketsinceearly2016,mostdevelopersreportedAsiaCreditResearchmuchimproved1H17resultsthatshoweddelev

2、eraging,improvedinterestservicesACDanielFancapabilityandbetterliquidity.Outliersarethoseadoptingasset-lightmodelsor(852)2800-8988excessivedebt-fundedexpansion.Salesmomentumremainshealthyassuggesteddaniel.cc.fan@jpmorgan.combytheupwardrevisiontofull-yearsal

3、estargetsbyaquarterofdevelopersinourJ.P.MorganSecurities(AsiaPacific)Limitedcoverage.However,webelievethepropertysectorhasprobablyhitthepeakofitscurrentcycle.Weseeriskofacyclicalslowdownin2018afterapossibleoverdraftofdemandsince2016.Inourview,thegoodnewsha

4、slargelybeenpricedinforthesectorasawhole,anditistimetocherrypickandsegregatewinnersfromlosers,leavinguswithonlyahandfulofpicksandsomepans.Financialsgenerallyimprovedin1H.Leverageintermsofnetdebt/EBITDAimprovedformostdevelopersonbettermarginsandstrongcashi

5、nflow.Ingeneral,EBITDAmarginimprovedasaresultofhigherASPgiventhestillstrongphysicalhousingmarket,expansionintohigher-marginuppertiercitiesandloweroperatingcostsduetoeconomiesofscale.Onthebackofstronger-than-expected1H17sales,around25%ofdevelopersunderourco

6、veragerevisedupwardstheirrespectivefullyeartargetssuggestingsalesmomentumcouldstayhealthyinthenearterm.AnotherpositivesignisthatsomedeveloperslikeYuzhou,CIFI,Sunac,ChinaSCEandEvergrandehavecapitalizedonthestrongequitymarkettoraiseequityandthusstrengthenedt

7、heirbalancesheets.Winnersarethoseabletoridethestrongphysicalmarket.IntheIGspace,twocompaniesstoodout,i.e.1)Sino-Oceanbenefittedfromitsaggressivesalespushthatshouldeventuallyhelptoloweritshigher-than-peerleverage;and2)Dalwandeliveredstrongnumbersbutthesewe

8、reunfortunatelycloudedbyuncertaintiessurroundingitsoverseasinvestmentsandchairman.Therestadoptingamorebalancedapproachdeliveredsatisfactoryresultsbutwealsoseelimitedroomforimprovementgoingforward.Inthedouble-