渣打standard charted176页中国房地产行业深度研究报告 英文 2010 11 20 震撼推出.pdfVIP

China | Real Estate EQUITY RESEARCH 20 November 2010 China Property Revisiting China’s property sector  The physical property market has softened following the escalation of government measures since late September. Standard Chartered’s house view is that China will raise interest rate four times by the end of 2Q11 as a means to contain inflation. On the back of this, we expect continued volatility in the property market over the next few months.  Macro and regulatory uncertainties have prompted most equity investors to assume underweight or neutral positions in the sector since late 2009, leaving it one of the worst-performing sectors in the market with an average 20% underperformance YTD. We do, however, see value emerging in the sector after a year of underperformance. We believe potential Rmb appreciation, low valuations and healthy financials create a superior return/risk scenario. Currently, the sector is trading at a 40% discount (historical avg: 20%) to forward NAV, the lowest level in the past 21 months, and at 10x 2010E PER. Such low valuation multiples should price in most unfavourable factors, in our view.  Given the near-term macro headwinds, we propose a selective sector investment strategy favouring developers with inexpensive valuations, sound financials and potential re-rating stories. We initiate coverage on 12 China developers, with Evergrande and Yuexiu Property as our top sector picks. We also like Shimao, PolyHK, Agile and COLI. We have an UNDERPERFORM on Sino-Ocean and Greentown and IN-LINE on CR Land, Guangzhou RF, Hopson and Shui On. BB code Rec Mkt cap Disc to Price PT Up/ PER (x) PBR (x) Net gearing