PROPERTYPRICEHIKESMOREMODESTTHANREPORTEDPOLICYRISKREMAINLOW0104

1、deutsche bankmarkets researchasiachinastrategyperiodicalmade in chinadate3 january 2013michael tong, cfajun ma, ph.dproperty: price hikes more modestchief economist research analyst(+852) 2203 8308 (+852) 2203 6167than reported; policy risk remain lowkey pointschina prop weekly - volume continued it

2、s strong momentum in the 4thweek of dec (jason ching)lin li, ph.dstrategist(+852) 2203 china property - affordability continues to improve (tony tsang)daily market statistics02/01/2013china property - inventory situations continue to improve (tony tsangtheme of the daychina property - actual price h

3、ikes more modest than reported; policy riskremains low (jason ching)headlines on developers hiking prices have sparked concerns of increasingpolicy risk. we have explicitly visited key cities and found that the situation hasperformancehsih-sharea300volumehsih-sharea300price23,31211,8982,523price2,12

4、92,5078,2001d% chg1d% chg67.869.40.01m% chg5.510.715.21m% chg14.114.555.6been exaggerated, with asp increases limited to city-center projects and in the3-5% range. while we expect prices to rise in 2013 on falling new supply, thiswill be moderate and gradual, on the back of purchase restric

5、tions, mortgagerestrictions and restrictive lending towards developers. moreover, as largedevelopers have a much bigger market share now and tend to be moreindexeshsiepsgperpbrcy20118.9%12.61.614/12/2012cy2012 cy20134.9% 6.9%12.0 11.21.5 1.3sensible in their pricing strategies, the excessive price i

6、ncrease witnessed inhsceicy2011cy2012cy20132h09 is unlikely to be repeated. thus, policy risk ahead is still low, in our view.(jason ching 852 2203 6205)http:/pull.db- hk15.3% 0.3%8.4 9.31.4 1.4cy2011 cy20123.9%9.01.3cy2013epsg13.5%-0.2%9.1%asia data flash - china pmi: steady recovery continues (jun

7、 ma)chinas official manufacturing pmi remained steady in december at 50.6.perpbrmsci china14.0 17.31.1 1.4cy2011 cy201215.91.3cy2013although slightly below the market consensus of 51.0, we still view this dataepsg13.4%0.9%8.8%point positive as it reconfirmed the modest expansion seen in the past few

8、months and reported by hsbc pmi. (jun ma 852 2203 8308)http:/pull.db- 9.5 11.0 10.1pbr 1.5 1.6 1.4data for 2011 are calculated using members, weights and prices fromthe 31st of december of that yeardb economic forecastschina prop weekly - strong sales momentum continues well into the year-endhong ko

9、nggdp (%)2012f1.32013f 2014f2.5 4.5(jason ching)total volume in the 40 major cities was up 11.8% wow to 8.014msqm duringmerch. exp. (%)cpi (%)4.44.01.7the week of 24-30 december, a return to the high levels last seen in earlynovember. despite the approach of the year-end, the strong momentu

10、m insales volume continued on the back of a better outlook in both the economyand the property market. moreover, affordability and inventory levelscontinued to improve. overall, four-week volume was up 81% yoy and 4%china 2012fgdp (%) 7.7merch. exp. (%) 7.0cpi (%) 2.6fx rate (eop) cny/usd 6.22source

11、: deutsche bank ag estimates2013f 2014f8.2 8.910.0 15.03.0 3.56.06 5.91mom, and 5% higher than the october 2010 peak. (jason ching 852 22036205)http:/pull.db- bank ag/hong kongdeutsche bank does and seeks to do business with companies covered in its research reports. thus, investors shouldbe aware t

12、hat the firm may have a conflict of interest that could affect the objectivity of this report. investors shouldconsider this report as only a single factor in making their investment decision. disclosures and analystcertifications are located in appendix 1. mica(p) 072/04/2012.3 january 2013made in

13、chinadb equity researchchina prop weekly - volume continued its strong momentum in the 4th week of dec(jason ching)total volume in the 40 major cities was up 8.7% wow to 7.126msqm during the weekof 17-23 december and back to the high levels last seen at end-november. despitethere being only one more

14、 week to go until year-end, the marked rebound in volume iswell within our expectations of a better outlook in both the economy and the propertymarket. some buyers are reportedly buying before the year-end in anticipation of aspincreases in 2013. overall, 4-week volume up 82% yoy and -2% mom, and do

15、wn 7%from october 2010 peak. (jason ching 852 2203 6205)http:/pull.db- property - affordability continues to improve (tony tsang)chinas national housing affordability, as measured by monthly mortgage burden, hasimproved from the latest peak in april 2011 to approximately 39.9% in november 2012,below

16、 the historical average of 46.4% since january 2005. on a national average,housing affordability improves as disposable incomes continue to grow. in our view,investors should focus on the stable and resilient growth of household income in china,which has been growing at a faster pace than home price

17、s in the last two years. (tonytsang 852 2203 6256)http:/pull.db- property - inventory situations continue to improve (tony tsang)for the 23 key cities we monitor, the average number of months required to clear theavailable-for-sale supply (which includes completed but unsold inventory and unsoldprop

18、erties under construction with pre-sale permits) has continued to decrease from apeak of 21.5 months in february 2012 to 10.4 months in november 2012, and isreaching the eight-month level from 2009 and 2010 (when new supply in thecommodity residential market was tight and led to faster property pric

19、e increases).(tony tsang 852 2203 6256)http:/pull.db- property - december sales stable as developers have achieved targets (tonytsang)we have surveyed 19 key listed developers on their contracted sales in december mtd- most developers expect sales to be stable or slightly down. among the 19, two exp

20、ecta slightly positive mom trend, seven expect slower sales as they have achieved theirannual targets already, and the other 10 developers see stable sales as year-endapproaches. with developers achieving a high percentage of their full-year sales targetsand northern china entering its low season in

21、 property sales, we believe property salesin december 2012 are unlikely to show a significant pick-up. (tony tsang 852 22036256)http:/pull.db- healthcare - china edge p101: monthly data tracker, december 2012 (jack hu)recent data suggest: 1) government healthcare spending increased 2% yoy innovember

22、; 2) patient monitor and ultrasound exports from shenzhen customsremained flat in november; 3) the 6-apa price and 7-aca price were slightly lower thanin november; and 4) tcm raw material pricing rebounded slightly after a sharp declineover the past few months due to de-stocking. we advise investors

23、 to exercise cautionwhen interpreting these data points. (jack hu 852 2203 6208)http:/pull.db- edge p102 - growth momentum continues for hospital patient visits in october(jack hu)in october 2012, inpatient/outpatient volume growth rates were 17%/11% yoy,respectively, vs. 7%/13% in october 2011 and

24、18%/10% in september 2012. on a ytd-october basis, inpatient/outpatient volume growth rates were 18%/11%, respectively,vs. 4%/11% yoy for ytd-october 2011 and 8%/7.4% yoy for fy2011. on a 3q12 basis,inpatient/outpatient volume growth rates were 18%/10%, vs. 18%/12% in 2q12 andpage 2deutsche bank ag/

25、hong kong3 january 2013made in china3%/11% in 3q11, respectively. we strongly believe that demand growth will translateinto drug/medical consumable sales, which is positive for manufacturers, such asshineway (2877.hk) and sino biopharma (1177.hk). (jack hu 852 2203 6208)http:/pull.db- - dec beats; s

26、moking ban a smooth transition on day 1 (karen tang)gaming revenue set a new high of mop28.2bn in dec (+20% yoy), beating octs record(mop27.7bn). both vip and mass markets were stronger than expected, and junketsconfirmed that vips are returning. smoking ban became effective on jan 1, and allcasinos

27、 we visited have set up clear signs. for example, we saw in galaxy macau thatsmoking is allowed on all the high-limit tables in the pavilion areas, while for theremaining mass floor, all tables on the left side are for non-smoking (right side forsmoking). while the smoking tables look slightly busie

28、r (80% occupied at 5pm), thenon-smoking tables are also reasonably busy (60% occupied). we expect limited impactfrom this rule. (karen tang 852 2203 6141)http:/pull.db- - dec hk property marketing takeaways (jason ching)we have just finished our china/hk property marketing trips in korea, hong kong,

29、singapore, shanghai and beijing and have gathered good feedbacks from investors.overall, investors are getting more positive on china property given strong demand andstable policy environments, while remained cautious on hk property given rising policyoverhang and weak sales volume. (jason ching 852

30、 2203 6205)http:/pull.db- - december china property marketing takeaways (jason ching)we have just finished our china/hk property marketing trips in korea, hong kong,singapore, shanghai and beijing and have gathered good feedbacks from investors.overall, investors are getting more positive on china p

31、roperty given strong demand andstable policy environments, while remained cautious on hk property given rising policyoverhang and weak sales volume. (jason ching 852 2203 6205)http:/pull.db- - chongqing property tour takeaways (jason ching)we spent 2 days in chongqing, visiting various residential a

32、nd commercial projects ofdevelopers like coli, c c land, longfor, sunac, cr land, wharf, hua yu and xie xin.overall, as in most other tier-1/2 cities, residential sales in chongqing have continuedto pick up at a solid pace, while asps have shown some moderate increases. also, wesee good traffic flow

33、s/ consumer activities in key shopping areas like guan yin qiao andjie feng bei. (jason ching 852 2203 6205)http:/pull.db- - hk prop: nov decline in mortgage application reflects policy impact (jasonching)according to hong kong monetary authoritys (hkma) newly released november 2012mortgage statisti

34、cs, new mortgage drawdown in november rose for fourth consecutivemonth to hk$21.16bn (+11.2% mom). however, new mortgage applications dropped18.9% yoy. meanwhile, new mortgage approved in november 2012 was down by 2.3%mom to hk$24.15bn. a key reason for the decline was attributable to the decrease i

35、nnew mortgages approved in secondary transactions following the extension of specialstamp duty (ssd) and introduction of buyer stamp duty (bsd) on 26 october, whichdropped 13.58% mom. however, new mortgage approved for primary property unittransactions rose 42.37% mom to hk$5.614bn on the back of th

36、e numerous primarylaunches over the period. (jason ching 852 2203 6205)http:/pull.db- - new household registration to stimulate investment opportunity (tony tsang)jrj reported that harbin and nanning municipal governments have recently announcednew measures and opinions on household registration. sp

37、ecifically, harbin governmentissued an opinion draft, stating that the city plans to launch a new householdregistration system to combine both urban and rural before 2015, replacing the currenthousehold registration system. meanwhile, nanning also issued the measures fordeutsche bank ag/hong kongpag

38、e 33 january 2013made in chinaimplementation of further reforms of household registration system, stating that thecity will no longer separate its household into urban and rural, and that one couldbecome a registered household if (1) buy a flat in the city, (2) work in the city for 4years, and (3) f

39、ulfilled certain investment amount. jrj said this latest attempts ofhousehold registration reform in 2 of chinas provincial city clearly indicated thegovernments determination to facilitate the next stage of urbanization. (tony tsang 852 2203 6256)http:/pull.db- - mlr to implement multiple measures

40、to tackle land kings (tony tsang)jrj reported from a recent press conference held by liao yonglin, head of the landuse management bureau in the ministry of land and resources (mlr), who had statedthat the mlr will increase efforts on policy guidance and strengths, closely monitor andapply tightening

41、 controls where necessary, to stabilize the land market by ensuringadequate supply of land, and to dampen any abnormal price volatilities in land prices.all provinces will be required to implement various measures such as carving-out oflarger land lots, joint-bidding, applying additional bidding ter

42、ms and increase paymentdifficulties, to avoid the emergence of land kings. at the same time, the ministry willimplement a system of closely monitoring large developers actions, and to initiateinvestigation on the recent land king transaction ie. nanjing xiaguang area land lot#2, won by mcc real esta

43、te group, which is 2012s most expensive land lot by totalvalue in china. (tony tsang 852 2203 6256)http:/pull.db- materials - 2012 cement price recap (johnson wan)after a disappointing 1h12, cement prices staged a mild rebound in end aug followinga recovery in infrastructure projects and a new round

44、 of production halts. however, therebound in cement prices was short-lived as cold weather and heavy rainfall reversedthe upward trajectory. nationwide inventories as of dec 28, 2012 are currently high at72% of storage capacity and the downtrend in cement prices is expected to continueover the next

45、two months. overall, national cement asps (low grade and high grade)declined from an average of rmb387/t to rmb336/t, down 13.3% yoy. this is a five-year low in cement prices, back to levels seen in 2008. high grade cement asps fellfrom rmb407/t to rmb351/t, down 13.8% yoy while low grade cement asp

46、s fell fromrmb367/t to rmb321/t, down 12.6% yoy. (johnson wan 852 2203 6163)http:/pull.db- & mining - china 2013 export tax cut on coke and copper (james kan)the finance ministry posted on its website on monday new export taxes for metalproducts in 2013. among the amendments, china will remove 4

47、0% export tax onmetallurgical coke and also abolish export tax for super high grade copper cathode withpurity over 99.9999% from its current 5% level. (james kan 852 2203 6146)http:/pull.db- - china ipps: a christmas gift received from the government (michael tong)on dec 25, state council in china a

48、nnounced the guideline of deepening the thermalcoal market reform which states the reimplementation of fuel cost tariff pass-throughmechanism” since it was lastly announced in 2004. key elements of the mechanisminclude 1) on-grid tariff adjustment will be trigged when coal prices change over 5%over

49、an 12-month period, 2) 90% of ipps fuel cost change can be passed-throughthrough tariff adjustment (vs. 70% previously stipulated). although power tariff reformis not totally unexpected, we view the time of announcement is earlier than what wehave expected as of sometime in 2013. this is a key posit

50、ive to the sector in terms ofrectifying ipps earnings vulnerability to coal price volatility, which bodes well for sectorvaluation multiple expansions. meanwhile, we see the convergence of contract andspot coal supply as well-expected. reiterate our buy call on all the five hk-listed ipps.(michael t

51、ong 852 2203 6167)http:/pull.db- - new rules on sub-debt: lt positive for brokers, but limited st impact (judyzhang)csrc has announced the new rules for sub-debt issuance by brokers and lowered theentry barriers to trade the sub-debt. key measures include: 1) allowing brokers to issuepage 4deutsche

52、bank ag/hong kong3 january 2013made in chinaand transfer sub-debt in interbank bond market and exchange bond market; 2) loweringthe entry barrier to invest in sub-debts; 3) broadening the duration of the sub-debt andallowing a certain percentage of sub-debt to be counted as brokers net capital based

53、on sub-debts duration; and 4) simplifying the sub-debt issuance procedure andincreasing the sub-debt issuance flexibility. (judy zhang 852 2203 6193)http:/pull.db- - launch of kaisa city plaza a success; fetching rmb800mn in sales (1638.hk,buy, target price: hkd 4.00, closing price: hkd 2.45, jason

54、ching)we reiterate our buy on kaisa following our visit to the kaisa city plaza project inshenzhen over the past weekend, of which the project was officially launched.according to management, the project fetched total sales of rmb800mn over theweekend. at an asp of about rmb20,000/sqm, we estimate a

55、 gross margin of about55%. we believe the success of kaisa city plaza will become a showcase of thesuperior profitability attached with redevelopment projects that kaisa has close to 10mnsqm (land area) in the pipeline, and should lead to further re-rating of the stock. (jasonching 852 2203 6205)htt

56、p:/pull.db- - unveils phase 3; unlocking value of its large landbank (0027.hk, buy, targetprice: hkd 31.00, closing price: hkd 29.75, karen tang)yesterday, at a press conference, galaxy ceo francis lui unveiled details of phases 3 &4 of galaxy macau. according to local press, phase 3 will have 1

57、0m sqft gfa, almost asbig as the total of phases 1 & 2 (11m sqft). phase 2 (5m sqft) is under construction andshould open by mid-2015. for phase 3, while the company already has land title, wenote that detailed building plans have yet to be submitted to the govt for approval. wealso think mgmts

58、expectation of a potential 2016 opening for phase 3 is tooaggressive. that said, we agree that galaxys significant landbank is very valuable. for2013, galaxy is one of our top picks in macau. trading at 11x 2013 ev/ebitda and 15x2013 pe, the stock offers very good value for its strong earnings growt

59、h. (karen tang 852 2203 6141)http:/pull.db- investment - gdi terminates property acquisition (0270.hk, buy, targetprice: hkd 6.40, closing price: hkd 6.13, kai-ting wong)gdi announced it will not proceed with the acquisition of 40% stake in the commercialproperties in guangdong which the parent comp

60、any acquired on 23 nov 2011 througha public auction tender. the key reason for this is that the department of foreign tradeand economic cooperation of guangdong province has disallowed the transfer ofshareholding in the property companies as the current prc government has a strictcontrol on foreign investment in