巴克莱资本88页香港房地产行业深度研究报告 英文

巴克莱资本香港房地产行业深度研究

EQUITY RESEARCH HONG KONG PROPERTY DEVELOPERS Initiation of coverage: Bubble wrap

Positive view on Hong Kong property developers: Although property prices are already overvalued against long-term fundamentals, we expect them to overshoot; low supply, a government unwilling to deflate house prices, negative real mortgage rates and high levels of equity are all supportive of higher property prices, in our view. While all eight developers should benefit, our 1-Overweight picks – SHKP, Sino Land and Kerry Properties – reflect our preference for shorter-duration land banks and the pre-selling of developments: ie, business models that capture the late-cycle returns, while managing the risks inherent in Hong Kong’s volatile property prices. Property price momentum remains: Despite the government’s recent measures, negative mortgage rates, a belief in the renewed investment potential of housing and strong homebuyer confidence will likely allow property price momentum to run for another 18-24 months. We forecast residential prices will increase 10-15% in 2011 and 10-15% in 2012: today’s residential market is more comparable to 1994/95 than the peak cycle years of 1996/97, in our view.

Look to capture late-cycle returns: While rising property prices are positive for all eight developers, our preference is for SHKP, Sino Land and Kerry, companies focused on pre-sales, with shorter-duration land banks and a focus on the cash-rich upper rungs of the housing ladder to capture the returns and manage the inherent risks of this stage of the cycle. Our 3-Underweight rating on Hang Lung Properties (HLP) reflects the high expectations priced into the stock and that investors have largely ignored the potential land appreciation tax (LAT) liabilities of its commercial properties in China.

US and China interest-rate risks: In the near term, higher interest rates in China, discouraging investment flows and negatively impacting confidence, remain a key risk. Yet, the largest risk, in our view, remains US interest rates, especially given the increased mortgage borrowing by homebuyers. We believe this interest rate link and investor sentiment will continue to tie developers’ stock prices to US-dollar movements. Figure 1: Hong Kong property developers’ valuation table

Price Potential (HK$)

Rating Price targetup/downside

Sino Land (83 HK) 1-OW 15.40 20.00 30%SHKP (16 HK)

1-OW 130.10 162.09 25%Kerry Properties (683 HK) 1-OW 40.50 48.63 20%Cheung Kong (1 HK)

2-EW 116.70 137.93 18%Henderson Land Dev. (12 HK) 2-EW 55.45 62.75 13%New World Dev. (17 HK) 3-UW 15.20 16.84 11%Hang Lung Group (10 HK)

3-UW 49.05 48.72 -1%Hang Lung Properties (101 HK)

3-UW

35.80

34.27

-4%

Note: Pricing as of 22 November 2010 Source: Barclays Capital estimates

Barclays Capital does and seeks to do business with companies covered in its research reports. As aresult, investors should be aware that the firm may have a conflict of interest that could affect theobjectivity of this report.

Investors should consider this report as only a single factor in making their investment decision. This research report has been prepared in whole or in part by research analysts based outside the US who are not registered/qualified as research analysts with FINRA.

23 November 2010

INITIATING COVERAGE

Hong Kong Property Developers 1-POSITIVE

from N/A

For a full list of our ratings, price targets and earnings in this report, please see table on page 2

Hong Kong Property Investors Andrew Lawrence +852 290 33319

wrence@ Barclays Bank, Hong Kong

Jonathan Hsu +852 290 34732

jonathan.hsu@ Barclays Bank, Hong Kong

Wendy Luo +852 290 34673 wendy.luo@ Barclays Bank, Hong Kong

Guide to the Barclays Capital rating system Our coverage analysts use a relative rating system in which they rate stocks as 1-Overweight, 2-Equal Weight or 3-Underweight relative to other companies covered by the analyst or a team of analysts that are deemed to be in the same industry sector (the “sector coverage universe”).

In addition to the stock rating, we provide sector views which rate the outlook for the sector coverage universe as 1-Positive, 2-Neutral or 3-Negative.

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