汇丰银行-中国房地产-china real estate：us investor feedback：maintaining optimism-20170718-hsbc

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1、18July2017ChinaRealEstateEQUITIESREALESTATEUSinvestorfeedback:MaintainingoptimismChinaExpectationofstronginterim-17earningsmomentumMichelleKwok*HeadofRealEstateResearch,ASPunderpinsinvestorinterestinthesectorTheHongkongandShanghaiBankingCorporationLimitedmichellekwok@hsbc.com.hkKeyconcernisonr

2、iskofshareplacementgivendevelopers’+85229966918AlbertTam*strongsharepriceperformanceYTDAssociateTheHongkongandShanghaiBankingCorporationLimitedShimao(813HK,HKD14.4,Buy,TPHKD18.50),andCOLIalbert.p.h.tam@hsbc.com.hk+85228224395(688HK,HKD25.60,Buy,TPHKD29.50)presentthemostSimonSin*upsidetoourTP;Ourcon

3、victionstockLongfor(960HK,AssociateTheHongkongandShanghaiBankingCorporationLimitedHKD18.46,Buy,HKD20.30)isupc90%YTDsimon.k.c.sin@hsbc.com.hk+85229966514USinvestorsareinclinedtoremainoptimistic.Persistentlystrongsales*Employedbyanon-USaffiliateofHSBCSecurities(USA)Inc,andisnotregistered/qualifiedpurs

4、uanttoFINRAregulationsperformanceofstockshaveseeninvestorsmaintaininterestintheChinapropertyspace,whilesomehavealsoenquiredaboutlaggardsthatcouldpotentiallyplaycatchup.Inourview,investors’optimismhasbeendrivenbyexpectationofstronginterim-17earningsreport,tobereleasedinAugust,althoughpartofthisappear

5、stobepricedin.ThereisunanimouspreferenceforqualityinstockselectionwhereLongforcontinuedtogarnerattention.Thatsaid,interestinCOLIappearstohaveresurfacedasinvestorsviewthisasaqualitylaggard.Whatareinvestorsworriedabout?Fundamentally,tightenedcreditconditions(intermsofmortgagelendingandfundingtodevelop

6、ers)presentuncertainty.However,implementationofproperty-specificmeasuresappearstobelessofaconcernasthecurrentpolicyapproachisonlytargetedatcitiesthatremainrelativelyheated.Outsideofpolicy,ahandfulofinvestorshaveraisedtheirconcernonpotentialshareplacementriskgivendevelopers’strongsharepricestrengthYT

7、D.Onthe“phoenixcities”.Whilemostinvestorswespoketowereunsureaboutthesustainabilityofthestrengthoftier-3citiesseenYTD,itwaswidelyacceptedthatmigrationdriversprovideafundamentalwaytojustifythestrongphys