高盛对中国房地产开发商深探究_42页_资料精

February 22, 2010

China: Real Estate Developers

Reshuffling picks on new risk/reward analysis amid tightening

Lowering target prices to reflect near-term tightening risk

We lower our 12-month target prices across our coverage group by 0%-

32% after increasing our target price discounts to NAV by 0-20 percentage

points (to within a range of 10%-40% from our prior 0%-30% range). This

reflects our concern of greater uncertainty arising from recent government

macro tightening. Although we believe its purpose is to slow, rather than

reverse, China’s economic recovery, we believe the tightening could affect

the pace of developers selling properties or realizing their land bank value

in the near-term and could therefore weigh on share price performance.

Current share prices are approaching our bear-case valuation

Recent falls mean share prices are on average only 8% higher than our

bear-case year-end 2010 NAV. We view our bear-case NAV as attractive

entry levels; as we would expect potentially less stringent government

tightening and/or strong property transaction volume support in the event

that our bear-case plays out — that is 30% reduction in property price from

current levels and 35% fall in volume over 2009. Even though current share

prices remain considerably above our worst-case year-end 2010E NAV —

of a 45% price fall from current levels and a 35% fall in volume — we think

this scenario is very unlikely unless there is a China economy double dip.

Picking stocks on risk/reward against our base and bear cases

(1) We like stocks that screen as having significant potential upside to our

base-case valuations (our 12-month target prices) as well as limited

downside to our bear-case NAV. The reverse is true for our Sell-rated

stocks. (2) We expect Shenzhen’s residential property market to be more

volatile in the near-term amid government policy tightening there given

higher speculative activities in the city. (3) We think the policy outlook for

commercial property is more stable, although we do not expect a strong

recovery in office rentals in key cities in 2010.

We upgrade Yanlord (YNLG.SI) to Buy from Neutral, Franshion (817.HK) to

Neutral from Sell, downgrade SZI (604.HK) (to Conv. list) and Greentown

(3900.HK) to Sell from Neutral. We retain Buy on Agile (3383.HK), Fantasia

(1777.HK), R&F (2777.HK; on CL), Shimao (813.HK), Powerlong (1238.HK),

Sino-Ocean (3377.HK), E-house (EJ), Vanke A/B (0/200002.SZ), Gemdale

(600383.SS) and Poly (600048.SS), but add Fantasia to our Conv. list in

place of Shimao. We retain Sell on CRL (1109.HK) and CWTC (600007.SS).

Key risk: Government over-tightening that induces macro hard landing.

Yi Wang, CFA

+86(21)2401-8930 | yi.wang@ Beijing Gao Hua Securities Company Limited Jason Sun

+86(10)6627-3187 | jason.sun@ Beijing Gao Hua Securities Company Limited Wendy (Yunting) Luo

+86(21)2401-8921 | yunting.luo@ Beijing Gao Hua Securities Company Limited Vicky Li

+86(21)2401-8926 | vicky.li@ Beijing Gao Hua Securities Company Limited Beijing Gao Hua Securities Company Limited and its affiliates do and seek to do business with companies covered in its research reports. As a result, investors should be aware that the firm may have a conflict of interest that could affect the objectivity of this report. Investors should consider this report as only a single factor in making their investment decision. For analyst certification, see the end of the text. Other important disclosures follow the Reg AC certification, or contact your investment representative.