china china propertypg.jrj.com.cn/acc/res/cn_res/indus/2016/6/13/715cae8c-3cfa-480… · 13 june...

Deutsche Bank Markets Research

Asia

China

Property

Property

Industry

China Property

Date

13 June 2016

Industry Update

Beijing Tour Takeaways: sustainable demand yet limited supply is expected Sales remained intact with stable growth in ASP; banks have been supportive

________________________________________________________________________________________________________________

Deutsche Bank AG/Hong Kong

Deutsche Bank does and seeks to do business with companies covered in its research reports. Thus, 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. DISCLOSURES AND ANALYST CERTIFICATIONS ARE LOCATED IN APPENDIX 1. MCI (P) 057/04/2016.

Foo Leung

Research Associate

(+852 ) 2203 6239

[email protected]

Iris Poon

Research Associate

(+852) 2203 6182

[email protected]

Tony Tsang

Research Analyst

(+852 ) 2203 6256

[email protected]

Top picks

China Resources Land (1109.HK),HKD17.98

Buy

Guangzhou R&F (2777.HK),HKD10.12 Buy

Joy City Property (0207.HK),HKD1.01 Buy

Longfor (0960.HK),HKD9.77 Buy

China Jinmao (0817.HK),HKD2.03 Buy

Source: Deutsche Bank

Companies Featured

China Resources Land (1109.HK),HKD17.98

Buy

Guangzhou R&F (2777.HK),HKD10.12 Buy

Joy City Property (0207.HK),HKD1.01 Buy

Longfor (0960.HK),HKD9.77 Buy

China Jinmao (0817.HK),HKD2.03 Buy

Sunac (1918.HK),HKD4.67 Sell

Country Garden Holdings (2007.HK),HKD3.06

Sell

Agile Property (3383.HK),HKD3.80 Sell

Evergrande (3333.HK),HKD5.20 Sell

China Vanke (000002.SZ),CNY24.43 Sell

Gemdale Corp (600383.SS),CNY10.89 Sell

Source: Deutsche Bank

We hosted a property tour in Beijing, visiting various property projects and meeting with local experts and sales teams. Overall, we found that developers are no longer launching large amounts of units. Property prices are still seeing healthy growth when compared to the earlier phases of the projects. Moreover, high-end demand has also remained strong with more upgrading under the loosened policy environment. We also found that banks remained supportive to homebuyers with 15% discounts being offered on first home mortgages in general. However, it is believed that continual price increment will be supported by the sustainable demand and limited supply.

Developers are not launching large batches of units At the different projects we visited, we found that developers have not been launching lots of units recently. We believe this could be not only to achieve a better sell-through rate, but it is also possible that developers are keeping some of the units to launch at a better price at a later date. In addition, it could indicate that supply in the projects is relatively limited. We are also seeing various developers adopting different strategies: while one is selling its last few units with very good location and layouts at higher ASP, another is taking subscriptions before the actual launch to secure the clients as well as the sell-through rate.

Supply of offices to be doubled in 2018-2020, changing structural demand In the office market, the current vacancy rate is only c.3% for Grade-A offices in Beijing A, which has resulted from the limited supply in recent years. Currently, there is about 2-3msqm of Grade-A office stock in Beijing. The upcoming supply will be crowded in the core CBD area with about 1msqm of new supply expected to be added to the market during 2018-2020. An expert from Savills is not expecting demand to pick up as fast as supply during 2018-2020. It would be more reasonable for the market to take about 5 years to digest the new supply; hence the supply-demand balance is likely to be restored in the period of 2022-2023. In addition, there is a new form of demand in the shared office area. However, as this business model is new to the market and the demand is not as sustainable as for conventional offices, the outlook of this sub-segment is uncertain at the moment.

Potential tightening expected in selected districts or nearby cities Recently there have been some media reports that potential tightening might be announced in some districts in Beijing such as Changping and Daxing. According to Savills, it would not be surprising to see more tightening measures in the city. Commenting on the multiple tightening measures in Tongzhou, the expert said it is possible for more government functions and hence offices to be moved into Tongzhou. Thus, the government would like to better manage the market discipline in the district.

Banks remained supportive on discounts for interest on first home mortgages During our visits to different projects, we found that banks in general are offering 15% discounts on the interest rate on first home mortgages while some banks are even offering 17% discounts. We were told that the mortgage approval time is about two weeks, which is no significant change when compared to 2015.

13 June 2016

Property

China Property


Beijing tour takeaways

Sustainable demand yet limited supply is expected

We hosted a property tour in Beijing, visiting various property projects and

meeting with local experts and sales teams. Overall, we found that developers

are now not launching large amount of units. Property prices are still seeing

healthy growth when compared to the earlier phases of the projects.

Moreover, high-end demand has remained strong and there has been more

upgrading under the loosened policy environment. We also found that banks

remained supportive to homebuyers with 15% discounts being offered on first

home mortgages in general. However, it is believed that continual price

increments will be supported by the sustainable demand and limited supply.

Details of projects visited

SOHO China – Guanghua Road SOHO2, 3Q business

Guanghua Road SOHO2 is located in the core CBD area in Beijing with GFA of

85ksqm office units and 34ksqm for retail use.

The company has converted all the retail area into its new business line, SOHO

3Q. It is a shared office product.

SOHO 3Q has become the largest shared office community in China since it

formally launched, with more than 13,000 seats, 16 centers opened in Beijing

and Shanghai and more than 30,000 members up to now.

The company plans to increase the number of seats to about 20,000 by the

end of this year.

For the conventional office area, the occupancy rate is 100% while the

occupancy for 3Q is less than 50% and the 3Q just launched for a short time.

The leasing terms of 3Q are flexible – it could be as short as 1 week and could

also be one year. Lessees can rent seats according to their needs. This could

be just one seat, or rooms of various size, which cater for start-ups and small

companies. Overall, there are about 3,000 seats in this 3Q area.

For other 3Q areas in Wangjing SOHO in Beijing, SOHO Fuxing Plaza and

Hongkou SOHO in Shanghai, the occupancy rates are 100%.

Lunch with Savills

Property sales in the Beijing market are now more concentrated outside the

fifth-ring, which accounted for 88.5% of the total sales volume during Jan

2015 – May 2016.

Inventory levels in the city have continued to fall since Nov 2015. Currently,

there is less than 10smqm of inventory in the city.

13 June 2016

Property

China Property


Since Jan 2015, residential property prices in Beijing have continued to

increase and the latest ASP in May was recorded at more than

RMB35,000psqm.

In terms of total value, units with total cost between RMB1m and RMB2m

accounted for about 41% of the market transactions.

For the luxury units with ASP over RMB50,000psqm, sales volume during

March to May have been significantly up yoy.

The Savills expert commented that land supply in the city during 1H16 has

been significantly less than that in the same period in 2013-2015. Moreover,

there should be less and less new land supply in Beijing under the Beijing-

Tianjin-Hebei integration development going forward.

In the office market, the current vacancy rate is only about 3% for Grade-A

offices in Beijing A, which has resulted from the limited supply in recent years.

Currently, there is about 2-3msqm of Grade-A office stock in Beijing. The

upcoming supply will be crowded in the core CBD area with about 1m sqm of

new supply expected to be added to the market during 2018-2020.

The expert from Savills does not expect that demand will pick up as fast as the

supply during 2018-2020. It would be more reasonable for the market to take

about 5 years to digest the new supply; hence the supply-demand balance is

likely to be restored in 2022-2023.

Commenting on the new demand for shared office areas like the SOHO 3Q and

also URWork by Mr. Mao Daqing (ex–senior management from Vanke), there

is also diversified demand. Those lessees in the SOHO 3Q area, which are at

more prime locations and charging higher rents, are more established

companies even though they are still small in scale.

According to the Savills, it will not be easy for rental growth to shoot up in the

midst of global economic slowdown and also regulations over the financial

companies.

The expert expects that more functions and office area will be relocated to

Tongzhou and hence stricter tightening measures on the property market have

been seen recently. In 3-5 years, supply in the district is expected to be high.

Recently, there have been some media reports that potential tightening might

be announced in some districts in Beijing such as Changping and Daxing. The

Savills expert said it would not be surprising to see more tightening measures

in the city.

Longfor – Jade Mansion

The project is located in the west third-ring road area in Li Ze Qiao, Fengtai

District.

The site was acquired in Feb 2014 and Longfor has a 50% attributable interest

in the project. Average land cost was about RMB26k psqm in GFA terms.

Land area of the site is about 70ksqm and planned GFA is 140ksqm, supplying

a total of 160 residential units and 119 villas.

13 June 2016

Property

China Property


The 160 high-rise units were launched in October 2015, and now only about 10

units remain. The ASP at launch was RMB75-80k psqm (fully-fitted, with

electric appliances). Currently, the ASP of the leftover units is more than

RMB100,000psqm.

Besides high-rise units, there are 99 stacked style villas with total cost of

RMB22-37m; about 70 villas of this type have been sold so far.

There are another 20 units of side-by-side villas with total cost of about

RMB65m. About 15 units have been sold so far.

Unit size of the villas ranged from 220-620sqm.

Since launch in June 2015, the villas have increased in price by about 10%.

Currently, banks are offering 15% discount on first home mortgages, with 2-4

weeks for approval time. There has been no significant change in banks’

policies when compared to last year.

CR Land – Parkland

The project is located in Huangcun area in Daxing District, with land area of

150ksqm and total planned GFA of over 280ksqm.

It is an approximate 30-minute ride by metro to the Financial Street in CBD.

The western part of the project was launched in 2011 and all the units have

been sold and delivered. Now about 12 units with premier ASP remain on the

eastern part of the project.

Units available now are with GFA ranged from 340-500sqm, with ASP of about

RMB60,000psqm (fully fitted), compared to the RMB20,000psqm when the

project was launched in 2011.

The latest launch of 60 units was in April; all units were sold on the launch day

with ASP of about RMB48,000psqm.

Banks are mostly offering 15% discount on first home mortgage while a few of

them have been more aggressive by offering 17-18% discounts. A sales

manager commented that the discounts offered by the banks have been

greater than last year.

About 20% of buyers in the project are paying the cost in a one-off payment.

Jinmao – Jinmao residence

The project is located in the economic development area of Yizhuang in Daxing

District. It lies in between the fifth and the sixth ring roads on the east-side of

the city.

The total planned GFA of the whole project is more than 1.0m sqm.

The first batch of units was launched in end-2013 with ASP of

RMB35,000psqm (fully fitted)

The latest launch was in April with two blocks of units, and ASP of the project

ranging from RMB45-50k psqm.

13 June 2016

Property

China Property


A total of 28 blocks with about 1,360 units located in the eastern and northern

parcels of the project have been launched and have almost sold out.

The majority of banks are offering 15% discounts on first home mortgages

while a few have been offering 17% discounts on first home mortgages.

13 June 2016

Property

China Property


Taking a look at valuations

Figure 1: China Prop – Disc to NAV (since 2006) Figure 2: China Prop – Disc to NAV (MktCap weighted)

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Source: Bloomberg Finance LP, Deutsche Bank,


Figure 3: China Prop – Sector P/E (Since 2006) Figure 4: China Prop – Sector P/E (MktCap weighted)

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Figure 5: China Prop – Sector P/B (Since 2006) Figure 6: China Prop – Sector P/B (MktCap weighted)

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13 June 2016

Property

China Property


Taking a look at valuations

Figure 7: China property – valuation table

DB Trade Report Mkt Cap

12M Daily T/O

10 Jun-2016

Target Implied Est. NAV EPS PE(x)

Company Ticker Rating Ccy Ccy USDm USDm Price Price Upside NAV Disc 15A 16E 17E 15A 16E 17E

Covered

Wanda 3699 HK Hold HKD CNY 28,989 27.6 49.70 42.00 -15% 70.0 -29% 2.95 3.41 3.93 14.2 12.3 10.7

CSCEC 601668 CH Buy CNY CNY 24,764 316.8 5.42 9.96 84% 12.4 -56% 0.87 0.97 1.09 6.2 5.6 5.0

China Vanke - A 000002 CH Sell CNY CNY 26,055 428.7 24.43 17.10 -30% 21.3 14% 1.46 1.70 1.88 16.8 14.4 13.0

China Vanke - H 2202 HK Hold HKD CNY 26,055 25.3 18.32 19.00 4% 23.8 -23% 1.46 1.70 1.88 10.6 9.1 8.2

CR Land 1109 HK Buy HKD HKD 16,841 36.5 18.86 28.67 52% 35.8 -47% 2.08 2.46 2.85 9.1 7.7 6.6

Poly - A 600048 CH Buy CNY CNY 13,876 228.9 8.47 9.77 15% 12.2 -31% 1.37 1.74 2.05 6.2 4.9 4.1

Evergrande 3333 HK Sell HKD CNY 9,358 35.8 5.31 1.97 -63% 3.3 62% -0.05 -0.11 -0.11 NA NA NA

Country Garden 2007 HK Sell HKD CNY 8,824 7.8 3.06 2.45 -20% 4.1 -25% 0.45 0.42 0.47 5.8 6.2 5.5

Gemdale 600383 CH Sell CNY CNY 7,636 74.4 11.14 8.60 -23% 13.2 -16% 0.89 0.94 1.03 12.5 11.8 10.8

Longfor 960 HK Buy HKD CNY 7,503 5.0 9.98 15.20 52% 19.0 -47% 1.27 1.26 1.34 6.7 6.7 6.3

GLP GLP SP Buy SGD USD 6,332 30.6 1.82 2.30 26% 2.4 -25% 0.05 0.05 0.05 28.5 25.3 25.1

CSCI 3311 HK Buy HKD HKD 5,236 10.3 10.02 15.09 51% 15.1 -34% 1.05 1.28 1.53 9.5 7.8 6.5

Shimao 813 HK Sell HKD CNY 4,429 11.5 9.90 7.71 -22% 15.4 -36% 1.42 1.70 1.75 5.9 4.9 4.8

Sino-Ocean 3377 HK Hold HKD CNY 3,175 11.5 3.28 4.16 27% 6.9 -53% 0.41 0.45 0.51 6.7 6.2 5.4

R&F 2777 HK Buy HKD CNY 4,218 8.4 10.16 11.99 18% 21.8 -53% 1.49 1.75 2.07 5.8 4.9 4.1

China Jinmao 817 HK Buy HKD HKD 2,846 3.7 2.07 3.25 57% 4.6 -55% 0.29 0.38 0.46 7.2 5.5 4.5

BJ North Star - H 588 HK Buy HKD CNY 1,852 0.9 2.23 6.90 209% 10.6 -79% 0.22 0.27 0.32 8.5 7.1 5.9

BJ North Star - A 601588 CH Buy CNY CNY 1,852 43.9 4.07 6.23 53% 9.6 -58% 0.22 0.27 0.32 18.4 15.2 12.7

Joy City 207 HK Buy HKD CNY 1,852 2.1 1.01 3.01 198% 4.3 -77% 0.04 0.08 0.14 23.6 10.2 6.2

KWG 1813 HK Hold HKD CNY 1,699 4.9 4.40 5.90 34% 9.8 -55% 0.97 0.98 1.04 3.8 3.8 3.6

Yuexiu 123 HK Sell HKD CNY 1,630 4.1 1.02 1.11 9% 2.2 -54% 0.12 0.13 0.11 7.1 6.8 7.8

Agile 3383 HK Sell HKD CNY 1,963 3.8 3.89 3.20 -18% 5.3 -27% 0.62 0.60 0.63 5.3 5.5 5.2

Sunac 1918 HK Sell HKD CNY 2,142 9.1 4.89 4.51 -8% 9.0 -46% 0.72 0.75 0.84 5.8 5.5 4.9

Greentown 3900 HK Buy HKD CNY 1,496 4.1 5.37 12.00 123% 17.1 -69% 0.48 0.88 1.41 9.5 5.1 3.2

Yanlord YLLG SP Sell SGD CNY 1,683 1.6 1.17 0.80 -31% 1.6 -27% 0.33 0.35 0.39 17.3 15.9 14.6

Kaisa 1638 HK Hold HKD CNY 1,032 NA 1.56 1.80 15% 6.7 -77% 0.72 0.81 NA 1.8 1.6 NA

Central China 832 HK Buy HKD CNY 447 0.2 1.42 2.51 77% 3.9 -63% 0.26 0.54 0.67 4.6 2.2 1.8

Not Rated

SOHO China 410 HK NR HKD CNY 2,432 4.5 3.63 NA NA NA NA 0.19 0.11 0.13 16.4 28.7 24.4

Hui Xian REIT 87001 HK NR CNY CNY 2,637 1.1 3.19 NA NA NA NA 0.25 0.26 0.26 13.0 12.5 12.3

Shui On 272 HK NR HKD CNY 1,996 3.2 1.93 NA NA NA NA 0.23 0.21 0.21 7.2 7.7 7.8

Hopson 754 HK NR HKD HKD 1,957 1.0 6.81 NA NA NA NA 0.52 0.61 0.53 13.2 11.3 12.8

CIFI 884 HK NR HKD CNY 1,590 1.9 1.84 NA NA NA NA 0.34 0.41 0.47 4.6 3.8 3.3

Poly Property 119 HK NR HKD HKD 943 4.6 2.00 NA NA NA NA 0.05 0.11 0.15 39.2 18.3 13.3

Greenland Hong Kong

337 HK NR HKD CNY 986 3.1 2.74 NA NA NA NA 0.14 0.32 0.53 16.8 7.2 4.4

Glorious 845 HK NR HKD CNY 723 0.4 0.72 NA NA NA NA 0.10 0.04 0.05 6.4 15.2 12.2

BC Land 2868 HK NR HKD CNY 1,045 2.0 2.68 NA NA NA NA 0.65 0.53 0.70 3.5 4.3 3.2

Yuzhou 1628 HK NR HKD CNY 1,008 1.3 2.05 NA NA NA NA 0.36 0.45 0.50 4.8 3.8 3.5

Powerlong 1238 HK NR HKD CNY 834 0.5 1.62 NA NA NA NA 0.32

4.3 NA NA

Fantasia 1777 HK NR HKD CNY 705 0.7 0.95 NA NA NA NA 0.22 0.29 0.33 3.7 2.8 2.5

C C Land 1224 HK NR HKD HKD 704 0.5 2.11 NA NA NA NA

NA NA NA

Aoyuan 3883 HK NR HKD CNY 545 0.6 1.52 NA NA NA NA 0.36 0.37 0.49 3.6 3.5 2.6

Minmetals 230 HK NR HKD HKD 388 0.2 0.90 NA NA NA NA 0.12

7.5 NA NA

Far East Global 830 HK NR HKD HKD 272 0.3 0.98 NA NA NA NA

NA NA NA

E-House EJ US NR USD USD 937 5.5 6.51 NA NA NA NA 0.36 0.37 0.49 15.3 14.9 11.2

Overall average

-40%

10.2 8.8 7.8 Source: Deutsche Bank estimates, Company data, Bloomberg Finance LP Consensus estimates for companies NR

13 June 2016

Property

China Property


Figure 8: China property – valuation table (continued)

EPS growth % BVPS PB(x) DPS Dividend yield % Net gearing %

Company Ticker 15A 16E 17E 15A 16E 17E 15A 16E 17E 15A 16E 17E 15A 16E 17E 15A 16E 17E

Covered

Wanda 3699 HK 16 15 15 39.8 42.1 44.6 1.1 1.0 0.9 1.2 1.3 1.5 2.9 3.2 3.6 67.7 54.7 48.1

CSCEC 601668 CH 15 12 12 5.6 6.1 6.9 1.0 0.9 0.8 0.2 0.2 0.3 3.7 4.1 4.6 36.6 25.7 10.5

China Vanke - A 000002 CH 21 17 11 9.1 10.1 11.2 2.7 2.4 2.2 0.7 0.8 0.8 2.9 3.1 3.2 7.3 13.6 12.7

China Vanke - H 2202 HK 21 17 11 9.1 10.1 11.2 1.7 1.5 1.4 0.7 0.8 0.8 4.6 4.8 5.0 7.3 13.6 12.7

CR Land 1109 HK 3 18 16 16.6 20.6 22.6 1.1 0.9 0.8 0.6 0.7 0.8 3.0 3.6 4.2 26.3 37.5 27.5

Poly - A 600048 CH 21 27 18 6.8 8.3 10.1 1.2 1.0 0.8 0.3 0.3 0.3 3.0 3.2 3.4 123.4 88.9 69.0

Evergrande 3333 HK

116 5 3.7 3.1 2.6 1.2 1.4 1.7 0.5 0.5 0.5 10.4 10.4 10.4 328.8 221.0 216.8

Country Garden 2007 HK -8 -6 11 3.0 3.3 3.6 0.9 0.8 0.7 0.1 0.1 0.1 5.0 5.0 5.0 64.1 6.0 59.3

Gemdale 600383 CH 14 6 10 7.8 8.5 9.4 1.4 1.3 1.2 0.2 0.2 0.2 1.4 1.5 1.7 79.3 79.8 80.7

Longfor 960 HK 5 -1 7 9.4 10.3 11.2 0.9 0.8 0.8 0.4 0.4 0.4 4.2 4.5 4.8 62.3 56.1 46.0

GLP GLP SP -8 13 1 1.8 1.9 1.8 0.7 0.7 0.8 0.0 0.0 0.0 2.1 2.4 3.5 12.2 21.4 NA

CSCI 3311 HK 20 22 20 5.3 6.2 7.4 1.9 1.6 1.4 0.3 0.3 0.4 3.3 3.4 3.7 46.4 41.2 29.9

Shimao 813 HK -38 19 3 14.4 15.5 16.6 0.6 0.5 0.5 0.7 0.7 0.8 7.1 7.1 7.6 80.2 73.0 74.5

Sino-Ocean 3377 HK -14 8 14 5.8 6.5 6.8 0.5 0.4 0.4 0.1 0.2 0.2 4.5 5.8 6.5 67.5 66.8 61.0

R&F 2777 HK 24 17 19 12.6 14.4 15.8 0.7 0.6 0.5 1.2 0.7 0.8 14.0 8.1 8.7 162.4 155.5 159.2

China Jinmao 817 HK -27 31 23 3.8 4.0 4.4 0.6 0.5 0.5 0.1 0.1 0.2 3.9 6.8 7.2 61.5 41.0 14.3

BJ North Star - H 588 HK 13 21 20 4.9 5.1 5.4 0.4 0.4 0.4 0.1 0.1 0.1 3.2 3.7 4.5 66.2 68.8 58.9

BJ North Star - A 601588 CH 13 21 20 4.9 5.1 5.4 0.8 0.8 0.8 0.1 0.1 0.1 1.5 1.7 2.1 66.2 68.8 58.9

Joy City 207 HK -16 132 64 1.8 2.2 2.3 0.5 0.4 0.4 0.0 0.0 0.0 1.2 1.8 2.9 58.2 38.8 20.3

KWG 1813 HK 4 2 6 7.5 8.1 8.9 0.5 0.5 0.4 0.3 0.3 0.3 7.8 7.5 7.5 69.1 56.5 39.6

Yuexiu 123 HK 3 5 -14 2.4 2.5 2.6 0.4 0.3 0.3 0.0 0.1 0.1 5.7 5.8 5.8 75.3 75.6 76.1

Agile 3383 HK -40 -3 5 8.8 10.4 10.8 0.4 0.3 0.3 0.4 0.2 0.2 12.0 4.6 4.8 64.7 60.1 54.4

Sunac 1918 HK -22 5 13 5.6 6.2 6.8 0.7 0.7 0.6 0.2 0.2 0.2 4.7 4.7 4.7 77.6 107.0 58.9

Greentown 3900 HK -54 85 60 12.5 13.3 14.6 0.4 0.3 0.3 0.0 0.1 0.2 0.0 3.0 4.8 73.2 59.1 50.8

Yanlord YLLG SP 29 9 9 10.1 10.4 10.7 0.6 0.5 0.5 0.0 0.0 0.0 0.2 0.2 0.2 47.5 50.5 46.4

Kaisa 1638 HK 13 12 NA 4.8 5.5 NA 0.3 0.2 NA 0.2 0.2 NA 15.6 17.7 NA 85.6 69.5 NA

Central China 832 HK -22 104 24 2.8 3.9 4.5 0.4 0.3 0.3 0.1 0.1 0.1 8.2 9.0 11.2 83.7 88.2 74.2

Not Rated

SOHO China 410 HK -56 -43 18 7.5 7.1 7.26 0.4 0.4 0.4 0.3 0.1 0.1 8.9 4.2 4.3 31.3 35.3 35.3

Hui Xian REIT 87001 HK 11 4 2 5.2 5.1 5.10 0.6 0.6 0.6 0.3 0.3 0.3 8.6 9.0 9.3 11.8 12.1 13.9

Shui On 272 HK 185 -7 -1 5.3 5.2 5.40 0.3 0.3 0.3 0.0 0.0 0.1 3.0 2.7 3.4 96.2 92.7 96.2

Hopson 754 HK -8 17 -12

NA NA NA 0.0 0.0 0.0 0.0 0.0 0.0 NA NA NA

CIFI 884 HK 0 20 15 2.0 2.2 2.53 0.8 0.7 0.6 0.1 0.1 0.2 6.0 9.0 10.2 95.6 22.3 76.8

Poly Property 119 HK -90 114 38 8.3 7.8 7.86 0.2 0.3 0.3 0.0 0.0 0.0 1.4 1.3 1.7 103.0 85.7 120.1

Greenland Hong Kong

337 HK 31 134 63 2.7 2.9 3.34 0.9 0.8 0.7 0.0 0.0 0.0 0.1 0.5 2.1 -17.6 -142.6 191.0

Glorious 845 HK -34 -58 25 2.0 2.1 2.10 0.3 0.3 0.3 0.0

0.0 NA NA 136.8 141.8 175.0

BC Land 2868 HK -14 -18 32 4.4 4.8 5.23 0.5 0.5 0.4 0.2 0.2 0.2 7.7 7.7 9.7 234.1 248.4 138.2

Yuzhou 1628 HK -20 25 11 2.6 2.9 3.09 0.7 0.6 0.6 0.1 0.2 0.2 7.6 9.7 10.1 78.2 1.7 54.3

Powerlong 1238 HK 19 NA NA 5.0

0.3 NA NA 0.1 0.1 0.1 5.5 5.8 6.0 NA NA NA

Fantasia 1777 HK 19 33 14 1.8 2.3 2.50 0.4 0.4 0.3 0.0 0.1 0.1 6.0 6.7 7.5 85.7 84.9 99.8

C C Land 1224 HK NA NA NA

NA NA NA

NA NA NA 26.7 NA NA

Aoyuan 3883 HK NA 3 32 3.2 3.2 3.61 0.4 0.4 0.4 0.1 0.1 0.2 8.6 10.1 14.0 76.5 72.3 NA

Minmetals 230 HK -40 NA NA

NA NA NA

NA NA NA NA NA NA

Far East Global 830 HK NA NA NA

NA NA NA

NA NA NA NA NA NA

E-House EJ US -16 3 32 3.2 3.2 3.61 1.7 1.7 1.5 0.1 0.1 0.2 2.0 2.4 3.3 76.5 72.3 NA

Overall average 0 24 17 0.8 0.7 0.7 4.9 5.2 5.5 75.9 63.2 69.0 Source: Deutsche Bank estimates, Company data, Bloomberg Finance LP Consensus estimates for companies NR

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Appendix 1

Important Disclosures

Additional information available upon request

Disclosure checklist

Company Ticker Recent price* Disclosure

China Resources Land 1109.HK 17.94 (HKD) 13 Jun 16 NA

Guangzhou R&F 2777.HK 10.10 (HKD) 13 Jun 16 NA

Joy City Property 0207.HK 1.01 (HKD) 13 Jun 16 NA

Longfor 0960.HK 9.77 (HKD) 13 Jun 16 NA

China Jinmao 0817.HK 2.02 (HKD) 13 Jun 16 NA *Prices are current as of the end of the previous trading session unless otherwise indicated and are sourced from local exchanges via Reuters, Bloomberg and other vendors . Other information is sourced from Deutsche Bank, subject companies, and other sources. For disclosures pertaining to recommendations or estimates made on securities other than the primary subject of this research, please see the most recently published company report or visit our global disclosure look-up page on our website at http://gm.db.com/ger/disclosure/DisclosureDirectory.eqsr. For disclosures pertaining to recommendations or estimates made on securities other than the primary subject of this research, please see the most recently published company report or visit our global disclosure look-up page on our website at http://gm.db.com/ger/disclosure/DisclosureDirectory.eqsr

Analyst Certification

The views expressed in this report accurately reflect the personal views of the undersigned lead analyst about the subject issuers and the securities of those issuers. In addition, the undersigned lead analyst has not and will not receive any compensation for providing a specific recommendation or view in this report. Foo Leung/Iris Poon

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Historical recommendations and target price: China Resources Land (1109.HK) (as of 6/13/2016)

1 23

4

5

6

7

8

9

0.00

5.00

10.00

15.00

20.00

25.00

30.00

Jun 14 Sep 14 Dec 14 Mar 15 Jun 15 Sep 15 Dec 15 Mar 16

Secu

rity

Pri

ce

Date

Previous Recommendations

Strong Buy Buy Market Perform Underperform Not Rated Suspended Rating

Current Recommendations

Buy Hold Sell Not Rated Suspended Rating

*New Recommendation Structure as of September 9,2002

**Analyst is no longer at Deutsche Bank

1. 30/12/2014: Buy, Target Price Change HKD25.59 Tony Tsang 6. 13/05/2015: Buy, Target Price Change HKD31.64 Tony Tsang




5. 04/05/2015: Buy, Target Price Change HKD32.30 Tony Tsang

Historical recommendations and target price: Guangzhou R&F (2777.HK) (as of 6/13/2016)

1

2

34

5

6 7

89

0.00

2.00

4.00

6.00

8.00

10.00

12.00

14.00


Secu

rity

Pri

ce

Date







1. 03/07/2014: Buy, Target Price Change HKD14.68 Tony Tsang 6. 05/11/2015: Upgrade to Buy, Target Price Change HKD9.99 Tony Tsang



4. 17/03/2015: Downgrade to Hold, Target Price Change HKD8.13 Tony Tsang


5. 20/08/2015: Hold, Target Price Change HKD8.21 Tony Tsang

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Historical recommendations and target price: Joy City Property (0207.HK) (as of 6/13/2016)

1

234

5

0.00

0.50

1.00

1.50

2.00

2.50

3.00


Secu

rity

Pri

ce

Date







1. 19/05/2015: Upgrade to Buy, Target Price Change HKD4.50 Tony Tsang




Historical recommendations and target price: Longfor (0960.HK) (as of 6/13/2016)

1

2

3

45

0.00

2.00

4.00

6.00

8.00

10.00

12.00

14.00

16.00


Secu

rity

Pri

ce

Date







1. 04/08/2014: Buy, Target Price Change HKD15.50 Jason Ching 4. 23/08/2015: Buy, Target Price Change HKD15.40 Jason Ching

2. 18/03/2015: Buy, Target Price Change HKD15.60 Jason Ching 5. 30/03/2016: Buy, Target Price Change HKD15.20 Jason Ching

3. 26/04/2015: Buy, Target Price Change HKD17.50 Jason Ching

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Historical recommendations and target price: China Jinmao (0817.HK) (as of 6/13/2016)

1 2

3

4

5

0.00

0.50

1.00

1.50

2.00

2.50

3.00

3.50


Secu

rity

Pri

ce

Date










Equity rating key Equity rating dispersion and banking relationships

Buy: Based on a current 12- month view of total share-holder return (TSR = percentage change in share price from current price to projected target price plus pro-jected dividend yield ) , we recommend that investors buy the stock.

Sell: Based on a current 12-month view of total share-holder return, we recommend that investors sell the stock

Hold: We take a neutral view on the stock 12-months out and, based on this time horizon, do not recommend either a Buy or Sell.

Newly issued research recommendations and target prices supersede previously published research.

54 %

36 %

11 %17 %15 % 22 %

050

100150200250300350400450500

Buy Hold Sell

Asia-Pacific Universe

Companies Covered Cos. w/ Banking Relationship

Regulatory Disclosures

1.Important Additional Conflict Disclosures

Aside from within this report, important conflict disclosures can also be found at https://gm.db.com/equities under the

"Disclosures Lookup" and "Legal" tabs. Investors are strongly encouraged to review this information before investing.

2.Short-Term Trade Ideas

Deutsche Bank equity research analysts sometimes have shorter-term trade ideas (known as SOLAR ideas) that are

consistent or inconsistent with Deutsche Bank's existing longer term ratings. These trade ideas can be found at the

SOLAR link at http://gm.db.com.

13 June 2016

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