中国-房地产行业-中国房地产：2020年仍然是机会之年

Disclosures & Disclaimer This report must be read with the disclosures and the analyst certifications in the Disclosure appendix, and with the Disclaimer, which forms part of it. Issuer of report: The Hongkong and Shanghai Banking Corporation Limited View HSBC Global Research at: https://www.research.hsbc.com  Macro and property policies to drive more share gains in 2020, but brace for volatility as market behaves myopically  We identify nine investment themes for the sector...  …and reiterate our Buy ratings on CRL, CIFI, China SCE, KWG, Shimao; initiate coverage on China Vanke with a Buy More upside ahead: We remain bullish on the China property sector on the back of macro policies such as the recent move to bolster bank liquidity, as well as real estate support. Importantly, we believe the market recognises the key risks at play − like refinancing challenges − and has already accepted that growth momentum will moderate. But it’s not all good news, amid external challenges and rising geopolitical worries, as this backdrop is leading investors to behave more myopically, which we think will lead to heightened share price volatility in 2020. We also believe the investment opportunity is shrinking following healthy gains last year. In this report, we identify nine themes for the sector and see investors rewarding defensive stocks with strong recurrent income and those with sector-leading sales execution. At the same time, the prospect of real estate policy loosening is also seen to benefit high-beta stocks trading at more compelling valuations. Overall housing market to shrink: Our six-metric diagnosis leads us to the view that developers’ operations will be challenged by the deteriorating real estate fundamentals. This should result in slower but still positive contracted sales growth among most stocks in our coverage. Broadly speaking, we believe scale expansion has peaked while the industry undergoes a period of rising housing completions. We remain committed to our thesis that the absolute size (in terms of annual housing sales volume) of the market has plateaued and will shrink in 2020e by 9% y-o-y. Property prices, NAVs and TPs: Against a backdrop of the government’s policy agenda emphasising ‘stability’, we expect residential prices to be flat in tier-1 and -2 cities, but down 3% in the lower-tier cities. Lower ASP estimates in general moderate our NAV estimates, while the modest NAV impact from price cuts is offset by commercial asset cap rate compression of 25bp and new landbank additions. Consequently we revise up our NAV estimates by 5% on average. Our TPs are revised up by 4% on average. Six stocks in focus; initiate coverage of Vanke with a Buy: Our preference for stocks spans across both quality defensive names as well as high-beta plays trading at relatively more depressed valuation levels. Our preferred picks are CRL, CIFI, China SCE, KWG and Shimao. With this report, we also initiate coverage of China Vanke with a Buy ra