Volatility Presents Opportunities in 2010 3
Policy environment not so easy in 2010, but no outright tightening 5
1. Supportive measures on transaction taxes and levies likely to
be withdrawn first 5
2. Rules on discouraging land hoarding to be re-emphasized 6
3. Increasing land supply 7
4. Tighter control of loans to developers 9
5. Cancelling discount on mortgage interest rates would likely be
one of the last resorts 10
6. Interest rate hike is less likely as it would fuel further pressure
on RMB 11
Beneficiary of RMB appreciation expectations 14
Focus on prime-location commercial properties 15
Residential properties: likely see more policy controls 18
Demand-supply balance should remain favorable unless we see
drastic policy changes 20
Forecasting housing demand using GDP forecasts 21
Forecasting housing supply using construction starts 22
Transaction Analysis 24
Inventory levels remain constructive 27
Housing Affordability Analysis 29
Beware Shenzhen and Hangzhou 29
Discount to NAV (Individual Stocks) 47
Price to Book Ratio (Individual Stocks) 50
Appendix A-1 53