2009 Property Strategy
Warm policies in a cold winter
China’s 2009 economic outlook is filled with uncertainty.
Growth pressure will bring about policy shifts for both the
macro-economy and the property sector, and excessive
liquidity may come back to the capital market. We anticipate
more policy changes this year, but given the longer time
needed to address the supply-demand imbalance, the
unattractive valuation of property stocks and the overall
economic gloom, we reiterate out NEUTRAL rating for the
sector.
Key Factors for Rating
While ordinary residential housing demand is likely to
recover, overall demand should not grow significantly in
2009, but should pick up in 2010. We expect that the
cumulative inventory level will peak in mid‐ or late‐2009,
and a reasonable supply‐demand ratio should be achieved
in 2011.
The sector will be policy‐driven in 2009. To date, the
government’s policies have been relatively moderate and
aimed at bolstering end‐user demand. Any additional
stimulus measures will depend greatly on the economic
performance and outlook in China.
Due to the potential poor 2008 results of China developers
and the risk of lower transaction volume after the recent
rebound, we expect the China developer sector to
underperform the market between late 1Q09 and early
2Q09. In view of the expected recovery in demand,
increased provisions to lessen risk, large companies’
renewed ability to secure equity financing, and major
merger and acquisition (M&A) opportunities during the
current downturn, the sector’s turning point may come as
early as 2H09.
Top Buy: ............
[此贴子已经被作者于2009-3-26 20:01:52编辑过]
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