Asia Pacific Equity Research

China Property Update
Aftershocks for the Chengdu market

发表机构：JPMorgan                   发表时间：11 June 2008

格式：PDF                                     页码：13

Getting more conservative on the Chengdu property market:
Judging from the experience of previous earthquakes, we expect
the Chengdu property market to come under pressure in the near
to medium term and transaction volume to stay low for the next 1-
2 quarters. We are assuming a 10% price drop in Chengdu in the
next 6-9 months, and cut our sales volume assumption for FY08
by up to 50% in our models.
• Impact is limited for most developers: Barring CR Land and
C C Land, we revise down our earnings estimates by only 0-6.2%
for FY08, and by 0-5.9% for FY09. Our estimated impact on
NAV is also relatively subdued with downward revisions ranging
from 0% to 4.4%. But the impact on C C Land is more significant,
with a 16% cut to FY09E earnings and further downside risk. CR
Land has higher Chengdu exposure than do peers, but the impact
is more contained with its investment property portfolio.
• We prefer developers with limited Chengdu exposure for the
time being: Although we expect the adverse impact to gradually
fade, the overhang is unlikely to be removed in the near to
medium term. Two of our top picks, Shui On Land and R&F, have
limited or no exposure to Chengdu. Hence, they remain our
favorites in the China property sector.