Table of Contents
Executive summary ........................................................................... 3
Outlook – current valuation reflects volume recovery...............................................................3
Valuation ..................................................................................................................................3
Risks ........................................................................................................................................3
Strong performance in March .......................................................... 4
Further supportive policies unlikely in short term .....................................................................4
Strong 1Q sales do not make a trend .......................................................................................4
Signs of demand weakness emerging in April..........................................................................5
Recovery already priced in ............................................................... 8
Long-term outperformance of China property vs. benchmark ..................................................8
NAV discount improved significantly from trough ....................................................................9
PE multiple expanded .............................................................................................................10
Physical market outlook ..........................................................................................................10
Investment strategy ........................................................................ 13
Investor tolerance for disappointment sends the wrong message.........................................13
NAV discount already lower than mid-cycle over 2000-2005..................................................13
Rating change summary .........................................................................................................14
Reduce exposure to large-cap and mid-cap developers .........................................................14
COLI .................................................................................................. 18
China Vanke ..................................................................................... 22
China Vanke ..................................................................................... 26
China Resources Land..................................................................... 30
Agile Property .................................................................................. 34
Shui On Land Ltd............................................................................. 38
Greentown China............................................................................. 44