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Copied from "aastocks" website on 19 sept 2017 :
Citigroup, in its report, believed that the PRC developer sector's current re-rating is sustainable over the coming years in three stages. The first stage of re-rating, starting from 2H16 to August 2017, has been completed.
The second stage begins from August 2017 to mid-2019. Driven by strong results of developers in 1H17, the broker said the second stage will be boosted by resilient earnings upcycle from 2017 to 2019 and the ROE rebound. After a quicker industry consolidation, robust contracted sales further enhanced the sector visibility in the future.
For the third stage after 2019, valuation multiples will further expand to 10-12x P/E or even higher. The market development will be more mature, as the government’s long-term housing mechanism is largely in place, thus reducing policy uncertainty, etc.
The broker believed that there are 14 PRC developers which are changing the business model now with better valuations, thus raised the target price of the developers by 18% on average.
Citigroup upgraded AGILE GROUP (03383.HK) +0.320 (+2.640%) Short selling $11.67M; Ratio 5.590% to Buy.
Industry top picks are COUNTRY GARDEN (02007.HK) +0.040 (+0.282%) Short selling $76.96M; Ratio 3.980% , LONGFOR PPT (00960.HK) +0.400 (+1.869%) Short selling $15.72M; Ratio 6.628% , CHINA JINMAO (00817.HK) +0.010 (+0.231%) Short selling $7.19M; Ratio 4.131% , R&F PROPERTIES (02777.HK) -0.200 (-0.969%) Short selling $37.14M; Ratio 10.285% , KWG PROPERTY (01813.HK) -0.040 (-0.432%) Short selling $19.82M; Ratio 8.901% and CIFI HOLD GP (00884.HK) +0.090 (+1.804%) Short selling $11.82M; Ratio 6.785% .
(Quote is delayed for at least 15 mins.Short Selling Data as at 2017-09-19 16:25.)
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just skimming through the closing share prices in today's scmp newspaper ( 26 Sept 2017) , it seems many China property stocks were severely hit by panic selling and some ended the day showing 15% loss.
It seems the cause of panic started after the news of local government authorities in 8 second tier cities had tightened up property transactions by "not allowing re-sale within 2-3 years from purchase". This step may reduce some buying demand but it is not enough to hurt developers profits since the underlying demand for new property continues to exceed the supply.
So Vauebuddies , don't Panic.
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Looks like the massive Wanda empire is about to get chopped up by the communist party...
http://m.scmp.com/business/companies/art...loan?amp=1
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Posted on aastocks website ( date on 10 Oct 2017)
Daiwa, in its report, listed the latest investment ratings and target prices of Chinese developers as follows:
Stock/ Investment Rating/ Target Price (HKD)
CHINA JINMAO (00817.HK) -0.070 (-1.683%) Short selling $8.11M; Ratio 10.593% /Outperform/3.57->4.5
CH OVS G OCEANS (00081.HK) -0.180 (-3.586%) Short selling $181.72K; Ratio 0.978% /Buy/6.15
CHINA OVERSEAS (00688.HK) -0.300 (-1.154%) Short selling $33.96M; Ratio 14.186% /Buy/32.1
CHINA RES LAND (01109.HK) +0.200 (+0.828%) Short selling $47.22M; Ratio 34.003% /Buy/31.2
R&F PROPERTIES (02777.HK) -0.700 (-3.646%) Short selling $25.86M; Ratio 22.257% /Outperform/16.9->21.97
JOY CITY PPT (00207.HK) -0.030 (-2.055%) Short selling $187.86K; Ratio 1.914% /Buy/1.45->1.74
KWG PROPERTY (01813.HK) -0.370 (-4.322%) Short selling $7.03M; Ratio 4.996% /Buy->Outperform/8.07->9.68
LONGFOR PPT (00960.HK) -0.640 (-3.107%) Short selling $8.68M; Ratio 12.139% /Buy/22.3->24.74
SHIMAO PROPERTY (00813.HK) -0.360 (-1.965%) Short selling $13.80M; Ratio 11.888% /Outperform/17.76->20.72
YUEXIU PROPERTY (00123.HK) 0.000 (0.000%) Short selling $912.06K; Ratio 1.909% /Outperform/1.63->1.78
(Quote is delayed for at least 15 mins.Short Selling Data as at 2017-10-10 16:25.)
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Posted on aastocks website (on 30 Nov 2017)
" Citi Expects 30% 2018 Sales Growth for CN Developers with 6 Top Picks"
Citigroup, in its report, said it estimated Chinese property developers to maintain high sales growth in future with 30% increase next year. Top picks included
COUNTRY GARDEN (02007.HK) ,
LONGFOR PPT (00960.HK) ,
CHINA JINMAO (00817.HK)
R&F PROPERTIES (02777.HK)
KWG PROPERTY (01813.HK)
CIFI HOLD GP (00884.HK)
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Property transaction volume of all major cities declined on a YoY basis in Nov,
according to China Index Academy. The effect of property regulating measures in China
continues to spread from major cities to the surrounding third and fourth tier cities.
Transaction volume of residential property lingered in low in Nov. Data from China Index
Academy shows that property transaction volume of all major cities continued to decline
on a YoY basis in Nov.
http://researchreport.bocomgroup.com/std171206.pdf
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China property prices go up with loan fraud:
https://www.reuters.com/investigates/spe...mortgages/
"...Zhu stood to make a tidy profit. She was not so keen to share gains with the government. Under the third contract she drew up with Lei, the Shenzhen flat was valued at only 2.8 million yuan, less than half its true value, the court records show. That contract was for showing to the taxman. At that value, Zhu would have saved more than 50,000 yuan in taxes, according to Shenzhen regulations.
In the vast majority of cases, fraudulent loan applications remain concealed as prices continue to rise and buyers meet their repayments. In Zhu’s case, the fraud only became public because she fell out with Lei, the seller."
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(16-12-2017, 10:16 AM)Porkbelly Wrote: China property prices go up with loan fraud:
https://www.reuters.com/investigates/spe...mortgages/
"...Zhu stood to make a tidy profit. She was not so keen to share gains with the government. Under the third contract she drew up with Lei, the Shenzhen flat was valued at only 2.8 million yuan, less than half its true value, the court records show. That contract was for showing to the taxman. At that value, Zhu would have saved more than 50,000 yuan in taxes, according to Shenzhen regulations.
In the vast majority of cases, fraudulent loan applications remain concealed as prices continue to rise and buyers meet their repayments. In Zhu’s case, the fraud only became public because she fell out with Lei, the seller."
wah not bad leh, like this can buy property with minimal deposit and pay minimal transfer taxes. Will be pretty painful for the banks if there ever was a widespread correction in property prices.
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17-12-2017, 03:32 PM
(This post was last modified: 17-12-2017, 03:40 PM by soros.)
Yes . Most definitely Yes . Agree it will be pretty painful for the bank ( and picture in Reuters report shows "Bank of China" branch in Shenzhen) if there is widespread correction in property prices..
But it is pretty painful now for the shareholders of that bank ( which is "Bank of China 03988.HK" )
In April 2015 when Hang Seng Index was around 24,000 level , the bank shares rose as high as $5.30 ( before going ex- dividend )
Now in Dec 2017 when the Hang Seng Index is over 29,000 level , the bank shares were kicked down and now dribbling around below the $4 level.
At friday's closing price of $3.77 , the market capitalisation value is about HK $315 Billion. If share price were at $5.30 , the market capitalisation would be up to HK$440 Billion.
So the shareholders loss is HK $125 Billion.
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(17-12-2017, 03:32 PM)soros Wrote: Yes . Most definitely Yes . Agree it will be pretty painful for the bank ( and picture in Reuters report shows "Bank of China" branch in Shenzhen) if there is widespread correction in property prices..
But it is pretty painful now for the shareholders of that bank ( which is "Bank of China 03988.HK" )
In April 2015 when Hang Seng Index was around 24,000 level , the bank shares rose as high as $5.30 ( before going ex- dividend )
Now in Dec 2017 when the Hang Seng Index is over 29,000 level , the bank shares were kicked down and now dribbling around below the $4 level.
At friday's closing price of $3.77 , the market capitalisation value is about HK $315 Billion. If share price were at $5.30 , the market capitalisation would be up to HK$440 Billion.
So the shareholders loss is HK $125 Billion.
I guess that's probably the market pricing in the clampdown on the banks and lending post-communist party congress.
https://www.cnbc.com/2017/12/13/china-de...nking.html
[ The efforts to move away from shadow banking practices are set to continue. Beijing has proposed greater oversight on wealth management products, estimated to be worth some 29 trillion yuan ($4.39 trillion) outstanding at the end of 2016, with 80 percent off the books.]
[ The Asian economic giant set up the Financial Stability and Development Committee in November for better financial oversight. ]
Regulation as always will be good for economic stability but bad for bank profits and share price.
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