房地产行业：销售驱动成长，业绩体现价值.docxVIP

Sales Drive Growth, Earnings Bring Value04/21/2019Overweight（Maintained）China Property AnalystJian SONG mailto:songjian@songjian@ SAC: S0190518010002SFC: BMV912Review: In our report “Counter-Attacking, Opportunity Outweighs Risk”we said that in 2019 we should stick to the certainty of property industry, by counter-attacking, opportunities outweigh risks. The base of defense was the historic low valuation, steady annual results, and dividend yield. The time to attack is when the regulations ease in tier-1 and tier-2 cities, liquidity looses, and risk preference increases. Leading companies can still expand their size and achieve higher-than-average growth rate. ContactNingxin YANmailto:yanningxin@yanningxin@ SAC：S0190118100175Summary: Contracted sales is the leading indicator ahead of revenues and profits. Listed companies’ average sales growth exceeded 40% since 2016 to 2018. The bookable resources are sufficient and the certainty of delivery in the future is high. Companies’ locked revenues continued to be released since 2016. In 2018 the average growth rate of core net profit reaches 35.6%, and the profit margin maintains at a high level. Dividend payout ratio reaches 35% and the dividend yield reaches 5%. The average net gearing ratio also decreases by 6 pct to 75%. The sales target for 2019 increase by 10-20% at average, meaning 50% to 60% sell through rate., still high above industry average level. We still think the certainty of industry lies in sales and performance, leading companies have significant advantages at land bank, financing, talents and brands.Prospect: We think China Property sector will embrace friendly external environment in 2019. Offshore: US stop raising interest rate, overseas liquidity is sufficient. Property companies have smooth US debt financing channels and the funding cost is decreasing, which is conductive to the refinancing of companies with high leverage. Sino-US trade negotiation processed smoothly, and the RMB-USD exc