sino-ocean land (3377 hk) - pg.jrj.com.cn
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FIG Real Estate Equity – China
Company report
abcGlobal Research
Stabilized shareholding structure clearing share price overhang: Sino-Ocean has
managed the exit of its original SOE parents and found two strategic investors who have
demonstrated that they are in for the long haul. Furthermore, both possess the capability
and the desire to cooperate with the company at both the project and corporate levels, and
look for opportunities for synergy.
Advantage in funding access, growing platform for investment properties: Sino-Ocean
enjoys a cost of funding advantage due to its legacy SOE status. China Life’s long-dated
funding represents a strong competitive advantage. This is enhanced by the recent changes
to CIRC rulings. Sino-Ocean is also developing a portfolio of high grade investment
properties through a strategic relationship with Swire Properties.
Engaging the expanded operational platform, organic deleveraging expected: Sino-
Ocean has transitioned to a larger operational platform, generating contract sales from
projects in 17 cities during 1H12. This compares favourably to projects in nine cities in
2010 and in five cities in the years before that. We estimate contract sales growth of 20%
or more in 2013 and beyond, providing relief to the balance sheet and allowing it to start to
deleverage organically. Initiate with OW(V): Our target price of HKD5.4 is based on a long-term 39% discount
(historical mean) to our 12M-forward NAV estimate of HKD8.8. We see two catalysts for
a rerating: recognition of the fact that the shareholding structure is no longer a liability,
but rather a competitive advantage in funding access and strategic partnerships; and, faster
than expected growth in contract sales, which should reaffirm and validate the success of
the nationwide expansion. Our earnings estimates are higher than consensus by 5% for
2012, 8% for 2013 and 11% for 2014. Downside risks: 1) continued operational
weakness leading to liquidity issues; and 2) issuance of hybrid securities or share
placement leading to dilution.
Overweight (V) Target price (HKD) 5.40 Share price (HKD) 4.40 Forecast dividend yield (%) 3.6 Potential return (%) 26.3 Note: Potential return equals the percentage difference between the current share price and the target price, plus forecast dividend yield
Dec 2011a 2012e 2013 e
HSBC EPS 0.28 0.30 0.37 HSBC PE 12.6 11.8 9.7
Performance 1M 3M 12M
Absolute (%) 17.0 0.5 66.7 Relative^ (%) 10.7 -2.4 48.6
Note: (V) = volatile (please see disclosure appendix)
9 October 2012
Phillip Zhong* Analyst The Hongkong and Shanghai Banking Corporation Limited +852 2996 6535 [email protected]
Derek Kwong* Regional Head of Real Estate Research The Hongkong and Shanghai Banking Corporation Limited +852 2996 6629 [email protected]
Ganesh Siva* Associate Bangalore View HSBC Global Research at: http://www.research.hsbc.com
*Employed by a non-US affiliate of HSBC Securities (USA) Inc, and is not registered/qualified pursuant to FINRA regulations
Issuer of report: The Hongkong and Shanghai Banking Corporation Limited
Disclaimer & Disclosures This report must be read with the disclosures and the analyst certifications in the Disclosure appendix, and with the Disclaimer, which forms part of it
Sino-Ocean Land (3377 HK)
Initiate OW(V): Getting back on course
Stabilized shareholding structure clears overhang; support from strategic investors at corporate and project levels with opportunities for synergy
SOE funding advantage; financing from China Life, enabled by recent CIRC rulings; growing platform of investment properties through partnership with Swire
Initiate with OW(V) and TP of HKD5.4, representing average historical discount to 12M forward NAV of HKD8.8; structural and operational hurdle cleared, rerating on the horizon
Enterprise value (CNYm) 48,590Free float (%) 84Market cap (USDm) 3,278Market cap (HKDm) 25,413
Source: HSBC
Index^ HSCEIIndex level 9,965RIC 3377.HKBloomberg 3377 HK
Source: HSBC
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Financial statements
Year to 12/2011a 12/2012e 12/2013e 12/2014e
Profit & loss summary (RMBm) Property sales revenue 17,618 21,559 25,648 33,827 Property inv & other rev 2,279 3,267 4,275 4,782 Cost of sales (13,639) (17,270) (20,834) (27,155)Gross profit 6,258 7,556 9,089 11,453 Selling & Admin expenses (1,596) (1,871) (2,160) (2,598)Other gains & misc 353 101 90 99 Operating profit/EBIT 5,015 5,786 7,020 8,954 Net interest (419) (453) (475) (502)Share of profit from associates 66 10 16 88 Non-operating profit/loss 513 0 0 0 PBT 5,174 5,343 6,561 8,540 Taxation (2,554) (2,448) (3,186) (4,391)Minority interests (50) (399) (495) (689)Net profit 2,571 2,496 2,880 3,460 Core Profit 2,186 2,496 2,880 3,460 Adj core profit 1,595 1,758 2,142 2,723
Cash flow summary (RMBm) Cash flow from operations (9,377) 1,660 3,726 6,350 Capex (74) (3,129) (3,463) (1,023)Change in investments 172 0 0 0 New shares issued 2,147 (737) (737) (737)Dividends paid (592) (717) (821) (1,016)Others 2,490 2,000 2,000 2,000 Net change in cash (5,235) (922) 705 5,573 Cash at the beginning 13,977 8,648 7,725 8,430 Cash at the end 8,648 7,725 8,430 14,003
Balance sheet summary (RMBm) Shareholders' funds 35,268 36,310 37,631 39,337 Long-term liabilities 19,106 23,132 26,311 27,711 Minority interests 3,489 3,888 4,383 5,073 Deferred items 1,387 1,387 1,387 1,387 Total capital employed 59,250 64,716 69,713 73,508 Fixed assets 5,688 8,816 12,279 13,302 Other assets 4,644 4,644 4,644 4,644 Current assets 99,954 105,795 113,662 123,369 Total assets 110,285 119,255 130,586 141,315 Ratio, growth and per share analysis
Year to 12/2011a 12/2012e 12/2013e 12/2014e
y-o-y % change Revenue 45% 25% 21% 29%Operating profit 37% 15% 21% 28%PBT 34% 3% 23% 30%Reported EPS -11% -13% 22% 27%HSBC EPS -12% 7% 22% 27%
Ratios (%) ROIC ex-exceptional 4% 4% 4% 5%ROAE ex-exceptional 7% 7% 8% 9%ROAA ex-exceptional 2% 2% 2% 3%Operating margin 25% 23% 23% 23%Core profit margin 11% 10% 10% 9%Interest cover ex-exceptional (x) 2.5 2.4 2.8 3.4 Net debt/equity (in-restricted cash) 60% 65% 65% 52%
Per share data (RMB) Reported EPS (fully diluted) 0.35 0.30 0.37 0.47HSBC EPS (fully diluted) 0.28 0.30 0.37 0.47DPS (HKD) 0.15 0.16 0.19 0.24BV 6.27 6.29 6.52 6.82
NAV breakdown
(RMBm) (HKD/sh) % of GAV
Development properties
Residential 67,348 13.7 79.1% Office/retail 6,963 1.4 8.2%Investment properties Office/retail 10,029 2.0 11.8% Hotel properties 796 0.2 0.9%Net debt (excluding restricted cash) (24,940) (5.1)Preferred and capital securities (8,502) (1.7)Outstanding LAT (3,393) (0.7)Outstanding land premium (5,000) (1.0)12M fwd. NAV 43,302 8.8 100.0%
Source: HSBC estimates NAV discount chart
-100%-80%-60%-40%-20%
0%20%40%
Sep-07 Nov -08 Jan-10 Mar-11 May -12
% to NAV +1 SDMean -1 SD
Source: HSBC estimates Price relative
02468
10121416
Sep-07 May -08 Jan-09 Sep-09 May -10 Jan-11 Sep-11 May -12
0246810121416
Sino Ocean Land Rel to HSCEI
Source: Thomson Reuters Datastream, HSBC estimates
Note: Price at close of 08 October 2012
Financials & Valuation: Sino-Ocean Land Overweight (V)
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Introduction We are initiating coverage on Sino-Ocean with an
Overweight (V) rating and a target price of HKD5.4,
based on a 39% discount to our 12-month-forward
NAV estimate of HKD8.8. This implies a potential
return of 26.3% from the current level, including a
dividend yield of 3.6%. (Potential return equals the
percentage difference between the current share
price and the target price, including the forecast
dividend yield when indicated.)
Sino-Ocean is a well-regarded regional developer
that recently expanded across China. The
company has cleared a structural hurdle under a
stabilized shareholding structure, removing the
share price overhang. It continues to enjoy a
funding cost advantage due to its quasi-state-
owned enterprise (SOE) background, as well as
financial and operational support from its strategic
investors. In particular, long-dated funding from
China Life should prove to be a strong
competitive advantage, especially in light of the
recent accommodative changes to China
Insurance Regulatory Commission (CIRC)
regulations. While the balance sheet is still
constrained, the company has shown early signs
of fully engaging its enlarged operating platform.
We expect the operational step up to provide
relief to the balance sheet.
Key positives We believe the major investment positives are: a
stabilized shareholding structure which clears a
major overhang; support of strategic investors at
corporate and project levels; legacy SOE status
translating into superior access to funding; and
Sino-Ocean’s emerging national platform.
Stabilised shareholding structure clears a major overhang
Over the past two years, the company has
managed the exit of COSCO and Sinochem,
which sold their stakes in Sino-Ocean. Two
strategic investors have taken their place, with
China Life building a stake of 24.1%, and Nan
Fung Development (NFD) taking a 17.7% share
in the company.
Both strategic investors have demonstrated a
long-term commitment to the company through
their involvement with Sino-Ocean over the years.
Investment summary
Stabilized shareholding structure removes price overhang;
support from strategic investors at corporate and project levels
SOE funding advantage persists; strategic relationship with China
Life opens door to long-dated funding under new CRIC rulings
Deleveraging expected, starting in 2014 as national operating
platform fully engages; initiate OW(V) with TP of HKD5.4 based on
historical mean discount to 12M-forward NAV estimate of HKD8.8
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China Life was one of the cornerstone investors
during the company’s IPO in 2007, while NFD
subscribed to 50% of the company’s convertible
bond issue in 2010 before acquiring an equity
stake in the company.
In our view, the company’s shareholding structure
is now stabilized, with the presence of long-term
strategic investors. This removes the price
overhang caused by COSCO and Sinochem’s
divestment of their stakes.
Furthermore, the company’s current shareholding
structure is unique among mainland developers. It
provides a foundation for superior corporate
governance and better protection of minority
interest due to the absence of a controlling
shareholder and the presence of a balanced board.
Strategic investors’ support at corporate and project levels
China Life and NFD have shown the desire and
the capability of co-operating with Sino-Ocean at
both the project and corporate levels.
On the project level, China Life and NFD provided
equity investments on three large projects. China
Life has also commissioned the company in the
construction of three corporate facilities.
On the corporate level, China Life can be a source
of long-dated financing to the company, reducing
both funding cost and interest rate risk. Given the
recent loosening of CIRC policies governing
insurance companies’ investment in real estate, it
should become apparent that the strategic
relationship with China Life represents an
important competitive advantage for Sino-Ocean.
We foresee this funding facilitating the
company’s undertaking of high capex commercial
projects. It will also provide a channel for the
company to monetize its growing investment
property portfolio either through taking out
operating loans or en-bloc sales.
Legacy SOE status translates into superior access to funding
Due to its legacy SOE status, Sino-Ocean has
superior access to funding relative to other private
sector developers. The company’s issuance of
perpetual subordinated securities in early 2011
compared favourably to other developers’ high
yield bonds. It is important to note that such
instruments are usually available to utility
operators bearing little market risks.
The company also has good access to the off-
shore syndicated loan market, as evidenced by an
USD600m term loan facility acquired in June
2012. This funding channel is only available to a
privileged few in the sector, mostly SOEs and the
strongest private sector developers.
Emerging national platform
The company embarked on nationwide expansion
in 2010, increasing its footprint from seven cities
to 16 cities in that year, and to 18 cities in 2011.
The company recorded contract sales from 16 and
17 cities in 2011 and 1H12. We view this as an
early indicator of the company’s emerging
national platform.
We expect contract sales to grow 15% in 2012 to
reach the full-year target of RMB27bn. For 2013
and 2014, we forecast contract sales growth to
accelerate to 23% and 21%, respectively.
Despite stepping up the operating platform, the
company has managed to maintain its asset turn and
cash collection rate. Projects in home cities continue
to sell well, retaining top project sales rankings.
Key concerns We believe the major investment concerns are:
concentration risk, margin squeeze, and balance
sheet stress.
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Concentration risk
The company is still exposed to significant
geographic and project concentration risks. The
Pan Bohai Rim and Northeast Region contributed
over 77% of contract sales for 2011 and 1H12.
Year-to-date contract sales are heavily dependent
on high-profile project launches.
While the concentration risks remain, we believe
the company will gradually mitigate such risks as
it continues to solidify its expansion and diversify
its contract sales across a broader portfolio of
cities and projects.
Margin squeeze
The company’s land bank expansion took place in
2010, with acquisition of 7.4m sqm in a single
year. The average land cost of those acquisitions
is 10% higher than the aggregate average cost.
Assuming a two-year delay between acquisition
and contracted sales, the higher land cost will
begin to filter through in 2012 and 2013 while the
physical market will show a slightly downward
trending or flat ASP.
While margin squeeze is part of a sector wide
secular trend, we expect the company to focus on
faster asset turn through quicker project launches
and a larger operating platform. The development
of investment properties should also blunt the
impact of the margin squeeze.
Balance sheet under stress
Our model shows the company’s net gearing
rising to the high 70% level in 2012 and 2013,
before declining in 2014. The high gearing ratio is
indicative of share placement risk.
While share placement risk exists for many
developers, factors such as availability of debt
financing and projected strong growth in contract
sales, should mitigate such risk for the company.
Organic deleveraging is feasible under stepped up
contract sales.
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Stabilized shareholding structure removes overhang After the SASAC announced the SOE real estate
business divestment policy in March 2010, the
company’s uncertain shareholding structure was a
source of anxiety for investors. Two years later,
the company managed the exit of COSCO and
Sinochem, and emerged with two major strategic
investors, China Life and NFD. In addition,
Wharf acquired a 5.07% stake in the company in
May 2011, and subsequently increased its stake to
6.02% in June 2012.
Strategic investors in for the long haul
China Life participated in the company’s 2007
IPO as one of the cornerstone investors (through
its HKD230m commitment). In December 2009,
China Life invested HKD5.8bn in a 16.6% stake
of the company through subscription. A few
weeks later, it acquired most of the shares held by
Sinochem, boosting its stake to 24.1%. All shares
were acquired at a price of HKD6.23.
Given China Life’s long-term involvement with
the company as well as the high entry price, we
believe it will continue its role as the largest
strategic investor and remain committed to the
company in the near to medium term.
NFD’s involvement with the company began in
July 2010, when it subscribed to 50% of the
company’s perpetual CB issuance at a conversion
price of HKD6.85. In December 2010, NFD
obtained 11.8% of the company by acquiring 70%
of the shares offered for sale by COSCO.
NFD is run by an experienced management team
headed by Vivien Chen. She had been with Nan
Fung for over 30 years, and succeeded her father
Dr Chen Din Hwa as Chairman in January 2009.
Hence, she was directly involved in the decision-
making process leading to the investment in Sino-
Ocean. We believe the recent death of NFD’s
founder, Dr Chen, will have no impact on NFD’s
strategic relationship with the company.
As further evidence of both strategic investors’
long-term commitment to the company, China
Life and NFD also subscribed to the perpetual
subordinated security issuance in May 2011,
essentially providing additional long-term capital
to the company.
Investment positives
Stabilized shareholding structure removes price overhang; full
support from strategic investors at project and company level
Leading market shares in home cities, strong cash collection ratio,
and rapidly growing platform of investment properties
Legacy SOE status allows for superior access to funding; China
Life provides a competitive edge under new CIRC rulings
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Given each party’s financial stability as well the
entry price, we believe that neither party is likely
to unwind its investment in the company in the
near term for financial reasons.
Project level support from major shareholders
Beyond fulfilling the role of a strategic investor,
China Life and NFD have demonstrated their desire
and ability to provide support on the project level.
China Life, through its associate companies,
invested in the company’s Plot Z13 project in
Beijing’s central business district (CBD) in
Chaoyang District. China Life contributed 70% of
the initial equity investment of RMB600m, and
subsequently acquired an additional 20% project
stake from Sino-Ocean.
Company management indicated that China Life
has shown willingness to participate at project
level through both equity investments and
shareholder loans. This is facilitated by the recent
changes in CIRC rulings which we will discuss
further in the sections below.
Similarly, NFD has demonstrated a keen interest
to participate on the project level. Currently, NFD
has established JVs with Sino-Ocean to develop
two projects: CBD Plot Z6 in Beijing’s Chaoyang
District and Ocean Diamond Bay in Dalian. NFD
has taken up stakes of 20% and 10%, respectively.
Joint ventures with China Life and NFD
Project City Partner Stake
Ocean Diamond Bay Dalian NFD 10% CBD Plot Z13 Beijing China Life 90% CBD Plot Z6 Beijing NFD 20%
Source: Company data
Company management indicated that NFD’s
participation is mainly motivated by its desire to
leverage Sino-Ocean’s connections to local
governments. Hence NFD will usually take on the
role of a minority stake holder at the project level.
Enlarged footprint, continued strength in home cities After mostly operating as a regional developer in
the Bohai Rim and Northeast Region, the
company embarked on an expansion initiative in
2010. During that year, the company grew its
footprint from seven cities to 16 cities. In 2011,
the company entered two more cities.
In merely two years, the company had expanded
into two hotly contested tier-one cities, Shanghai
and Shenzhen. It also entered Hainan, a vacation
and leisure market driven by non-core demand, in
which the company had no prior experience. The
company also entered into the Western Region
where it had no previous presence.
In 2011, the company recorded sales from
projects located in 16 cities, compared to sales
from nine cities in 2010 and only five before that.
In 1H12, the company continued the trend,
recording contract sales from 17 cities. We view
this as an early indicator of the success of the
company’s expansion programme.
Geographic expansion over time
2008 2009 2010 2011
Beijing Beijing Beijing Beijing Tianjing Tianjing Tianjing Tianjing Shenyang Shenyang Shenyang Shenyang Dalian Dalian Dalian Dalian Hangzhou Hangzhou Hangzhou Hangzhou Zhongshan Zhongshan Zhongshan Zhongshan Huangshan Huangshan Huangshan Changchun Changchun Qinhuangdao Qinhuangdao Qingdao Qingdao Shanghai* Shanghai Wuhan** Wuhan Chongqing** Chongqing Chengdu** Chengdu Haikou** Haikou Sanya** Sanya Shenzhen* Zhenjiang
*New tier one cities, **New geographic region or market segment Source: Company data
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Our discussions with management indicate that
the company has now completed its geographic
expansion, and the operational focus will shift to
deepening its penetration of newly entered cities.
The company’s projects remain well regarded in
its traditional home cities such as Beijing, Dalian,
Shenyang and Zhongshan, as reflected in market
share and project sales rankings.
1H12 market share and project sales ranking
City Mkt share ranking Project
Project sales ranking
Beijing 4 Ocean La Vie 3 Ocean Diamond Bay 1 Ocean Worldview 3 Ocean Times 4
Dalian 1
Ocean Plaza 5 Fushun 2 Ocean City 1 Zhongshan 2 Ocean City 1
Source: Company data
Asset turnover is a common measure of
operational efficiency. We define asset turnover
as GFA sold as a percentage of average land size.
We believe this is a more pure measure, free of
distortions driven by asset prices. Despite the
jump in land bank size, the company maintained
its historical asset turnover ratio. As investors
often hold the view that the company has weak
execution ability, we believe the operational
capability demonstrated here shows a respectable
performance among its peers. Another indicator of operational strength is the
company’s cash collection ratio, which stands out
in the sector, both due to the high percentage, as
well as its consistency over the years. The
company has maintained a cash collection ratio
greater than 93% since 2008, the only developer
to do so in the sector.
Recent cash collection rate
Company 2011 1H12
Agile 69% 83% COLI 53% 65% Country Garden 95% 88% CR Land 107% 91% Evergrande 80% 85% GZ R&F 76% 91% KWG 69% 66% Longfor 88% 93% Shimao 72% 76% Sino Ocean 95% 93% Yanlord 95% 85%
Source: Company data, HSBC estimates
Platform for investment properties Currently, the company’s investment property
portfolio consists of five projects totalling GFA
320,000sqm, contributing only 2% of total revenue
in 2011. We estimate this to grow nearly 1m sqm
by 2013, contributing 7% of total revenue.
The growth is attributed to two JVs with Swire
Properties, Indigo in Beijing and Dacisi in
Chengdu. Both are mixed-use projects to be
anchored by premium retail, grade-A offices and
Swire hotels. Through cooperation with an
established Hong Kong developer, we expect the
company to strengthen its capability for
developing similar high-grade investment
properties in years to come.
Under CIRC’s 2012 circular published in July,
insurance companies are permitted to invest up to
20% of their total assets in real estate. In addition,
when investing in real-estate related financial
products, insurance companies, along with their
affiliates, are permitted to invest up to 60% of the
total issuance. Furthermore, if an insurance
company already holds an equity position in a
project company, it can extend shareholder loans
Turnover measured by GFA sold and land bank
Company 2008 2009 2010 2011 2012 1H
Agile 6% 9% 9% 10% 9% COLI 11% 17% 16% 16% 22% Country Gdn 0% 11% 14% 13% 11% CR Land 3% 10% 9% 11% 13% Evergrande 0% 12% 10% 10% 9% GZ R&F 6% 10% 11% 9% 8% KWG 0% 0% 13% 11% 9% Longfor 0% 8% 9% 11% 10% Shimao 5% 9% 8% 6% 9% Sino Ocean 6% 11% 10% 11% 9% Yanlord 0% 17% 8% 5% 5%
Source: Company data, HSBC estimates
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equal to 40% of the total investment of the
project. These changes should increase insurance
companies’ appetite for income producing
commercial properties in prime locations to match
their long-dated liabilities.
We believe a strategic relationship with China
Life offers an important funding channel.
Compared to developers’ usual short-term sources
of funding, investments from an insurance
company can significantly reduce interest-rate risk
and provide a financial cushion in a volatile
financial environment. Monetization can be in the
form of operating loans or en-bloc sales.
The company also acquired 70% of Gemini
Investments, a Hong Kong listed company.
Gemini is the GP of a real estate fund seeded with
capital from Sino-Ocean and KKR. The company
intends to use Gemini as an off-shore vehicle to
leverage property funds and offshore developers
for project-level investments.
Superior access to funding The company accessed the capital market on two
occasions in recent years, issuing a perpetual
subordinated CB (PCS) in July 2010 and a
perpetual subordinated bond (PSS) in May 2011.
More recently, the company obtained a syndicated
loan in June 2012.
During 1H11, the market was very receptive to
Chinese developers issuing high yield bonds.
Many listed developers issued USD bonds with
rates near or above 10%. Only CRL and
Franshion, both SOEs, were able to obtain
funding with yields below 10%. The company’s
coupon rate of 10.25% on its PSS compares
favourably to other developers’ high yield
issuances with terms of only three to seven years.
While the PSS was structured with a rate step up
in five years, the company also has an interest
deferral option as well as a call option.
It is important to note that the company’s choice
of issuing perpetual was unusual for a mainland
developer. The instrument was largely reserved
for utility operators with high credit quality off-
takers, sparing the bondholders from all market
risks. The issuance of the perpetual bond was a
first for a mainland developer, indicative of the
uniquely strong credit profile of the company.
To determine the marginal cost of debt, we also
examined the current bond yield of developers’
issuances of comparable vintage. We believe the
PSS’ current yield still compares favourably.
Developer bond issuance during 1Q-2Q11
Issuance date
Company Type Term Coupon Current yield
Feb-11 Country Garden Sr Notes 7 11.13% 11.00% Mar-11 Shimao Sr Note 7 11.00% 11.23% Mar-11 Powerlong Sr Note 3 11.50% 19.60% Mar-11 Yanlord Sr Note 7 10.63% 11.89% Mar-11 KWG Sr Note 5 12.75% 12.18% Apr-11 Longfor Sr Note 5 9.50% 8.11% Apr-11 Franshion Sr Note 10 6.75% 7.70% May-11 Sino Ocean Perp Perp 10.25% 12.98% May-11 CRL Sr Note 5 4.63% 3.62% May-11 Kaisa Sr Note 4 13.50% 12.39% Jul-11 CRL Sr Note 5 4.63% 3.62%
Source: Bloomberg data
In June 2012, the company obtained a three-year
multi-currency syndicated loan at an all-in rate of
532bps (LIBOR/HIBOR plus 400bps). This puts
the company among a group of privileged
developers with access to the offshore syndicated
loan market.
Off-shore syndicated loans in 1Q-2Q12
Issuance date
Company Amount Term
Apr-12 COLI HKD7.6bn 3-year loan at HIBOR+400bps Apr-12 Longfor HKD 2.43bn 3-year dual currency loan at
LIBOR/HIBOR+400bps Jun-12 SOHO USD626m 3-year loan at LIBOR/HIBOR +
425bps Jun-12 Sino-
Ocean USD600m 3-year multi-currency loan at
LIBOR/HIBOR plus 400bps
Source: Company data
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As we mentioned before, both major shareholders,
China Life and NFD, have supported the company
on the corporate level by subscribing to significant
portions of the company’s equity and debt
placements in the past, enhancing the attractiveness
of its offerings to the capital market.
In our view, given the company’s legacy status
with COSCO and its current relationship with
China Life, the company enjoys a quasi-SOE
status, placing it close to SOEs and above most
private sector developers in terms of
creditworthiness.
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Geographic and project concentration risk remain In the year to August, the company achieved
contract sales of RMB20.2bn, accounting for 75%
of its full-year target of RMB27bn. While the run
rate is 5pts ahead of the sector average of 69%, the
company is still exposed to considerable
concentration risks. At the geographic level, despite
the expanded footprint, the company derives three-
quarters of its contract sales from its home markets,
the Pan Bohai Rim and Northeast China.
Contract sales split between PBR/NE and other regions
0%
20%
40%
60%
80%
100%
2008 2009 2010 2011 2012 1H
PBR or NE Other
Source: Company data
Similarly, sales are dependent on high profile
launches. Contract sales had been lagging through
May. In June, sales reached an impressive
RMB5.9bn, a historic high for the company, driven
by three new launches. New launches contributed
over 40% of the monthly sales. Not surprisingly, the
sales pace moderated in subsequent months.
June contract sales of recent project launches
Project Launch
dateUnits
launchUnits sold
Amt RMBm
Sell thru rate
Ocean City, Fushun 1-Jun 1900 Ocean Crown, Beijing 9-Jun 158 23 429 15% Ocean Diamond Bay, Dalian 26-Jun 2770 909 1,601 33%
Source: Soufun
Monthly contracted sales run rate
0%
20%
40%
60%
80%
100%
Jan Mar May Jul Sep Nov
2011 2012
Source: Company data
Investment concerns
Concentration risk due to continued reliance on two home regions
as well as high-profile project launches
Margin squeeze due to both top-line and bottom-line factors
further down the road
Balance sheet remains constrained in near term; hybrid securities
will dilute earnings due to the lack of capitalization
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For 1H12, the company indicated that it had
saleable resources of RMB25bn from existing
launches, coupled with RMB10bn in new
launches. Of the total saleable resources of
RMB35bn, the company achieved contract sales
of RMB13.7bn, or a sell through rate of 39%. For
2H12, the company has not given guidance on the
amount of saleable resources from new launches.
Instead it intends to stay flexible on projected
launches based on realized sell-through rate.
Using the company-provided launch schedule, we
note the project launches in 1H12 accounted for two-
thirds of the full year projected GFA sold. The three
abovementioned high-profile projects accounted for
about 240,000sqm projected GFA sold, including
one that was fast tracked into 2Q from 3Q.
Projected GFA sold based on launch time
Type Launch date Projected contracted GFA (000 sqm)
Existing n/a 403 438 New Q1 87 94 New Q2 1,169 1,308 New Q3 561 641 New Q4 84 89
Source: Company data
While the number of projects for sale and total
sellable resources will be higher in 2H, most rapid
sales generally occur shortly after the launch time.
Hence, we expect a lower sell-through rate in
aggregate for 2H, and for the pace of sales to
moderate.
SG&A as % of contracted sales
(RMBm) 2008 2009 2010 2011
Contracted sales 7,243 14,316 21,603 27,005 Selling & marketing costs 251 318 441 776 as % of contracted sales 3.5% 2.2% 2.0% 2.9% Administrative expenses 420 320 457 820 as % of contracted sales 5.8% 2.2% 2.1% 3.0%
Source: Company data
We also examined the sales and marketing
expense, as well as administrative expense as
percentage of contracted sales of each year. Both
ratios rose more than 40% in 2011 after being flat
in previous years.
While the concentration risks remain, we believe
such risks will be gradually mitigated as the
company continues to solidify its nationwide
expansion and diversify its contract sales across a
broader portfolio of cities and projects. The jump
in SG&A costs can be attributed to the geographic
expansion. We expect SG&A costs to revert to a
more normal level once the company fully
engages its enlarged operating platform.
Margin squeeze
We note the company embarked on a shopping spree
in 2010, both in terms of volumes bought as well as
prices paid. While 2009-10 was a period of higher
land prices, an examination of land acquisitions by
city tier revealed that most acquisitions in 2010 were
biased toward lower-tier cities.
Land acquisition by year
Year acquired
Acq cost (RMBm)
Sellable GFA (sqm)
Avg land cost (RMB/sqm)
2004 789 510,000 1,547 2005 776 200,000 3,880 2006 3,974 1,445,000 2,750 2007 9,297 2,802,000 3,318 2008 9,948 5,187,000 1,918 2009 8,282 2,429,000 3,410 2010 29,856 7,446,000 4,010 2011 8,390 3,720,000 2,255 Total 71,311 23,739,000 3,004
Source: Company data
The company made two expensive acquisitions in
2010: Ocean Crown in Beijing and Bond Castle in
Shanghai. Excluding these two projects, the
company spent RMB24bn or RMB3,300/sqm for
land plots mostly in lower-tier cities. This is still
10% higher than the aggregate land bank average
of RMB3,000/sqm.
Land acquisition by year and by city tier
Year Tier 1 Tier 2 Tier 3
2004 51% 49% 0% 2005 100% 0% 0% 2006 22% 78% 0% 2007 15% 85% 0% 2008 27% 73% 0% 2009 24% 73% 4% 2010 7% 60% 33% 2011 25% 54% 21%
Source: Company data
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Not surprisingly, the company appears to be more
competitive in its home market as defined as cities
entered before 2010, mostly in the Bohai Rim and
Northeast Region. We examined the recognized
land cost as percentage of the ASP for historical
years as well as for the 2012 projection. The
company enjoys a 5pts advantage in its home cities.
Recognized land cost as a percentage of ASP
0%
10%
20%
30%
40%
2008 2009 2010 2011 2012e
Year
Lan
d co
st /
ASP
Home Ex pansion
* Home market defined as cities entered before 2010 Source: Company data, HSBC estimates
Given the government’s continued effort to curb
the housing market and projected flat sales for the
company, we expect ASP to moderate slightly
from the current level. Meanwhile, on the top line,
we estimate the company’s booked ASP will peak
in 2013 before dropping slightly in 2014. As
higher land costs filter through, the gross margin
will drop from 2012 onward.
Historical and estimated net gearing
(%)
7177 77
65
49
0
20
40
60
80
100
2010 2011 2012e 2013e 2014e
Source: Company data, HSBC estimates
While the margin squeeze is part of a sector-wide
trend, we believe the company can counter this
risk by focusing on faster asset turn through
quicker project launches and a larger operating
platform. The margin squeeze will also be
partially offset by the growth of rental income
which commands a much higher gross margin.
Historical and projected gross margin
0%
10%
20%
30%
40%
2010 2011 2012e 2013e 2014e
Year
Gro
ss m
argi
n
property dev elopment Aggregate
* Home market defined as cities entered before 2010 Source: Company data, HSBC estimates
Balance sheet constrained Our model shows net gearing rising in 2012-13,
reaching 77% before declining in 2014. This is
projected under the assumptions of a scaled back
land bank acquisition of RMB5bn per year and a
19% CAGR in contracted sales growth from
2012-14e. As a point of reference, the company’s
land bank acquisition averaged RMB13bn per
year over the past five years. Excluding the
spending spree in 2010, the company averaged
acquisitions of RMB8bn per year. Assuming the
company hits its 2012 contract sales target of
RMB27bn, the y-o-y sales growth would be 15%.
In late 2011, Sino-Ocean signed a MOU with
Swire, its JV partner for Chengdu’s Dacisi
project. Under the agreement, Swire acquired an
additional 31% of the project stake and will
advance USD230m to cover an unsettled land
premium and working capital. The agreement
includes a call option for Sino-Ocean and a put
option for Swire to transfer the stake back to Sino-
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Ocean at an interest rate of 10%. This amounts to
a shareholder loan. In a similar effort, Sino-Ocean
sold a 20% stake in the CBD Z13 project in
Beijing to China Life in April.
For the 2011 year-end dividend payment, the
company offered a scrip dividend scheme to
shareholder so they could receive additional
shares in lieu of cash. The scrip share was priced
at a 5% discount to the average trading price. The
discount percentages have moved in step with the
company’s net gearing. Therefore we expect the
discount to widen in the coming years.
Scrip share discount by year
0%
2%
4%
6%
8%
10%
12%
2008 2009 2010 2011
0%
20%
40%
60%
80%
Scrip share discount Net gearing
Source: Company data
These transactions are indicative of the
company’s efforts to conserve cash and keep
gearing in check. The constrained balance sheet
points to a possibility of share placement. While
such risk exists for many developers in the sector,
certain factors, such as availability of debt
financing and potential growth in contract sales,
should mitigate this for the company. We believe
the company will be able to organically
deleverage through stepped up contract sales.
Hybrid securities impacting earning The company has issued two hybrid securities in
the past: an USD900m perpetual subordinated
(PCB) convertible bond in July 2010 and an
USD400m perpetual subordinated bond (PSS) in
May 2011.
While PCB and PSS provided a cheaper option
for raising capital than equity placements at the
time, as well as being a means to minimize impact
on gearing, they continue to dilute earnings.
As the distributions to hybrid securities are
reported below the tax line, the company cannot
utilize the tax shield offered by traditional debt
financing. While interest incurred from off-shore
borrowings is not directly tax deductible against
on-shore earnings, Chinese developers typically
achieve the same effect by capitalizing 90% or
more of the interest expenses.
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Valued by forward NAV We use an NAV approach as the basis of our
valuation methodology. Under this approach,
using project-specific information such as sellable
GFA, completion schedule, construction cost, pre-
sale schedule and expected ASP, we calculate the
value of each existing or prospective project using
a discounted cash flow method to derive the GAV
of each project. We then deduct the net debt
amount, unpaid land premium and outstanding
LAT liability from the aggregate projected NAV
to derive our 12-month-forward NAV estimate.
In our NAV estimate, we include sites for which
full titles have been obtained. We also include
sites for which the company is applying for land
use rights for which there are no material legal
impediments. We deduct all outstanding land
premiums at today’s value based on the payment
schedule provided by the company.
As of end 2011, the company had a land bank of
24m sqm attributable GFA, including completed
investment properties and properties under
development. The company did not make any
land acquisitions year to date. We have not
accounted for land under primary land
development or a master agreement with local
governments in our NAV calculation, in line with
our valuation approach for other China property
companies under our coverage.
Capital securities, both convertible and perpetual
bonds are treated as debt securities and their par
value is subtracted from the NAV to derive the
value attributed to common shareholders.
NAV methodology We derive our NAV estimate for the company
using our proprietary model, which incorporates
the latest audited balance sheet and earnings data,
as of December 2011, as well as project details
given in the historical public announcements.
We separately list and value each property held by
the company. This enables us to test the
sensitivity of NAV to many variables, such as
property prices, interest rates and discount rates.
Key assumptions used to derive our NAV
estimates are as follows:
ASP assumptions based on what a given
property would fetch if it were sold today.
Sites with land titles as well as sites that
should receive land titles in the next 12
months are included.
Development cost assumptions, such as site
preparation, construction, utility and
Net asset value
12-month-forward NAV per share estimated at HKD8.8
Residential projects account for 86% of GAV with commercial and
hotel properties taking up 9% and 5%, respectively
The Bohai Rim and Northeast projects account for 44% and 29%
of GAV, respectively, making sales highly seasonally
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infrastructure, on a project-by-project basis
from financial statements and management’s
account.
A discount rate of 11.64%, representing the
company’s WACC.
Investment properties are valued based on
prevailing cap rates for each property type.
First, we determine the GAV of each project using
a discounted cash flow approach. The expected
cash flows of each project are based on our
estimated contracted sales timeline and
completion schedule, which in turn allows us to
estimate the sales proceeds, construction costs and
other expenses for the year.
We use a WACC of 11.64% as the discount rate.
The WACC is based on a risk-free rate of 3.5%
and an equity risk premium of 10%, with a beta of
1.21. We assume a cost of debt of 7.65% and a
target debt ratio of 40%.
Derivation of WACC
Risk free rate 3.50% Adjusted beta 1.21 Market risk premium 10.00% Cost of equity 15.58% Target debt ratio 40% Cost of debt 7.65% Corporate tax rate 25% WACC 11.64%
Source: HSBC estimates
Second, we deduct minority interests and relevant
taxes for development projects to arrive at an
attributable post-tax GAV. For investment
properties, valuations are made based on
prevailing rents and capitalisation rates for each
property type.
Third, we deduct net debt, capital securities,
outstanding land premium and expected LAT
liabilities to derive our NAV estimate. According to
the company, there is an outstanding land premium
of RMB5bn, all of which will be paid in 2012.
Lastly, we derive the current NAV per share by
dividing the aggregate NAV by the number of
shares outstanding.
NAV estimate (RMBm)
2012e
Development properties / under development Commercial 6,963 Residential 67,348 Investment properties / under development Commercial 10,029 Hotel 796 GAV (excluding LAT) 85,137 Net debt (24,940) Preferred and capital securities (8,502) Outstanding LAT (3,393) Outstanding land premium (5,000) NAV 43,302 Shares outstanding (m) 5,772 NAV per share (RMB) 7.50 NAV per share (HKD) 8.83
Source: HSBC estimates
Impact of CB conversion We gauge the impact of the CB by assuming full
conversion at end 2012. Given a conversion price
of HKD6.85 per share, issuance size of
USD900m, and a fixed exchange rate of USD1/
HKD7.774, upon a full conversion, the number of
shares would increase 18.2% and reduce NAV by
4.5% per share.
NAV impact of CB conversion
Original Conversion After Change
2012e NAV (RMBm) 46,401 5,945 52,346 Shares outstanding (m) 5,622 1,021 6,643 18.2%
NAV/share (RMB) 8.25 5.82 7.88 NAV/share (HKD) 9.71 6.85 9.27 -4.5%
Source: HSBC estimates
Sensitivity analysis Our NAV calculation incorporates our best
estimate of ASPs across various projects based on
current sales prices. To assess the impact on NAV
under changing market conditions, we conduct a
sensitivity analysis by varying the ASP as well as
the discount rate.
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Our analysis excludes the impact on properties
largely pre-sold or sold but not yet booked as their
sales prices have been locked in.
As indicated by the NAV sensitivity analysis,
assuming the current discount rate, the NAV
estimate would decrease by 12% and 25% if the
ASP drops by 5% and 10%, respectively.
NAV (HKD/share) sensitivity to WACC and ASP changes
________________Change in ASP _________________ 8.83 -10% -5% 0% 5% 10% 10% 7.42 8.64 9.85 11.04 12.22 11% 6.98 8.16 9.32 10.47 11.62 12% 6.56 7.70 8.83 9.94 11.05 13% 6.16 7.26 8.35 9.43 10.50
WA
CC
14% 5.78 6.84 7.90 8.94 9.98
Source: HSBC estimates
NAV % sensitivity to WACC and ASP changes
_______________ Change in ASP ________________-10% -5% 0% 5% 10%
10% -15.9% -2.1% 11.6% 25.0% 38.5% 11% -20.9% -7.5% 5.6% 18.7% 31.7% 12% -25.7% -12.8% 0.0% 12.6% 25.2% 13% -30.2% -17.7% -5.4% 6.8% 19.0%
WA
CC
14% -34.6% -22.5% -10.5% 1.3% 13.1%
Source: HSBC estimates
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Initiate Overweight (V) with target price of HKD5.4 We are initiating coverage on the stock with an
Overweight (V) rating and a target price of
HKD5.4, implying a potential return of 26.3%,
including a dividend yield of 3.6%. We include a
volatility flag as the stock’s monthly average
volatility is 45%. Potential return equals the
percentage difference between the current share
price and the target price, including the forecast
dividend yield when indicated.
Under HSBC’s research model, the Overweight
rating band for volatile Chinese stocks is 10ppt
above the hurdle rate of 10%, or 20% above the
current share price. We therefore have an
Overweight (V) rating on the stock.
Looking across the sector, Chinese property
stocks generally trade at a discount to current
NAV over a long period, given the long inventory
cycle. We observe an average discount of 20%
across the industry, with large players, such as
COLI and China Vanke, generally faring 20pt to
30pt better than smaller players. Currently, the
sector is trading at an average discount of 41%, or
one standard deviation below the historical mean.
Chinese developers’ NAV discount
-80%
-60%
-40%
-20%
0%
20%
40%
60%
2005 2006 2007 2008 2009 2010 2011 2012
% to NAV +1 SD Mean-1 SD -2 SD
Source: Company data, Thomson Reuters Datastream, HSBC estimates
Sino Ocean NAV discount
-100%
-80%
-60%
-40%-20%
0%
20%
40%
Sep-07 Nov -08 Jan-10 Mar-11 May -12% to NAV +1 SDMean -1 SD
Source: Company data, Thomson Reuters Datastream, HSBC estimates
Valuation
We initiate with an Overweight (V) rating and a target price of
HKD5.4
Target discount of 39% based on the historical average discount
since IPO
Potential return of 26.3% with a dividend yield of 3.6%
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While the macro environment is slowing, coupled
with the continuing policy headwinds in the form
of HPR, this is the balanced by the government’s
supportive policy toward end user demand. Given
the company’s success in overcoming its
structural challenge as well as the completion of
its initial expansion programme, we believe an
NAV discount equal to the historical mean is
appropriate. The current share price of HKD4.50
represents more than one and a half standard
deviations below the historical mean.
Target price derivation
12M-forward NAV per share (HKD) 8.8 Historical average NAV discount 39% Monthly standard deviation of historical NAV discount 20% Target historical NAV discount 39% Target price (HKD) 5.40 Current share price (HKD) (Oct 8, 2012) 4.40 Dividend yield 3.6% Potential return 26.3%
Source: HSBC estimates
Standard deviation for all companies under coverage
SOL
SOHO R&FFranshion
Sino OceanShimaoKWGCGAgile
Yanlord
COLI CRL Longfor
(1.00)
(0.75)
(0.50)
(0.25)
0.00
0.25
0.50
0.75
1.00
Standard dev iation
Deeper
discount to
mean
Source: HSBC estimates
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Earnings profile Introduction
We derive our earnings forecasts from a financial
model built on historical financial and operating
data provided by the company, our discussions
with management on its financial and operating
expectations, our discussion with project
managers, and our own assumptions.
Our 2012-14 forecasts also rely on the company’s
audited financial results over 2009-11, which
were prepared by PricewaterhouseCoopers.
Revenue lock-in analysis Revenue lock-in ratio analysis
RMBm
Sold but unrecognized revenue, Dec 2011 24,032 Contract sales in 2012 through Aug 2012* 19,057 2012e revenue target** 21,559 2013e revenue target** 25,648 2012e revenue lock in ratio 100% 2013e revenue lock in ratio 84%
*After business tax, ** Property development revenue Source: Company data, HSBC estimates
With RMB24bn in sold but unrecognized revenue at
the end of 2011, and RMB20.2bn contracted sales in
the year to August, the company has locked in 100%
of its 2012e revenue and 84% of its 2013e revenue.
Based on our model, we have identified the
following characteristics to the company’s
earnings picture for 2012-14.
2012 – Focus on Bohai Rim and Northeast Region
The company will derive most of its revenue from
projects in the Bohai Rim and Northeast Region.
In Beijing, we expect Poetry of River Phase I,
Ocean Great Harmony, Ocean La Vie to be major
contributors, providing RMB5bn in revenue. Two
Dalian projects, Ocean Worldview and Ocean
Time, will contribute RMB3.5bn. One large
project outside the company’s traditional strong
base, Ocean Mansion in Hangzhou, will
contribute RMB3bn. Overall, 85% of the property
sales revenue will be from the Bohai Rim and
Northeast Region.
The majority of these projects were acquired
before 2010, hence the land costs were relatively
cheap. We project the gross margin to hold
roughly flat at 31%, the same as 2011.
Earnings analysis
100% and 30% revenue lock-in ratios for 2012e and 2013e,
respectively
Projects from the Bohai Rim and Northeast Region will remain
dominant, accounting for 80% or more of revenues in the near term
Property development gross margin is under pressure, but the
impact is muted by the growth of investment properties
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2013 – Slowly going national
Despite the recent expansion, the Bohai Rim and
Northeast Region will remain dominant with 82%
of revenue contribution in 2013e, down 3pts y-o-
y. Major contributors are Ocean Landscape,
Poetry of River, Ocean Great Harmony, Ocean
Palace in Beijing, Ocean City in Tianjin, and
Ocean World View in Dalian. Projects acquired in
2010 will also begin to contribute, including
Ocean Plaza in Dalian, Quanzhoulu Project in
Qingdao, and Ocean Century in Qinhuangda.
These projects, with a relatively higher land cost
percentage, will cause the project development
margin to decline to 28%.
2014 – Further diversification
Continuing the trend seen in 2013, we estimate
revenue contributions from the Bohai Rim and
Northeast Region will decline to 80%, with cities
in Yantgze River Delta and Southern Region now
making meaningful contributions. Such projects,
including Ocean City in Zhongshan, Ocean
Chanson Mansion in Shanghai and Canal
Business Center Project in Hangzhou now
collectively contribute RMB5.2bn in revenue.
Growing portfolio of investment properties
The company’s portfolio of investment properties
consists of several commercial properties in
Beijing as well as the Shui On Building in
Shanghai, held by its subsidiary Gemini.
We expect rental revenue to grow significantly in
the years ahead. In 2012, the company will add
Indigo to its portfolio. Indigo is a mixed-use project
in Beijing jointly owned by Sino-Ocean and Swire.
It is expected to add 200,000sqm of high quality
commercial space. In 2012, the company will see
the opening of Wyndham Grand Plaza in Dalian. In
2013, the Dacisi Project in Chengdu will open,
adding more than 260,000sqm of commercial
space. The Dacisi Project is also a JV between the
company and Swire.
Estimated core profit by year
RMBm 2012e 2013e 2014e
Core profit 2,496 2,880 3,460 y-o-y growth 14% 15% 20%
Source: HSBC estimates
Earnings sensitivity Our earnings forecasts use our best estimates of
ASP based on prevailing market conditions with
no price escalation built in. We have performed an
earnings sensitivity analysis showing potential
earning changes with respect to different
residential price assumptions.
We estimate that for a 5% decline in asset prices
over our model assumptions, our net profit
estimates would decline by 3% in 2012, 19% in
2013 and 21% in 2014.
Earnings sensitivity to change in property prices
_______________ Change in ASP ________________-10% -5% 0% 5% 10%
2012e 2,974 2,746 2,496 2,228 1,950 2013e 1,743 2,323 2,880 3,414 3,942
Net
pro
fit
2014e 1,999 2,744 3,460 4,150 4,833
Source: HSBC estimates
Earnings sensitivity to change in property prices
_______________ Change in ASP ________________-10% -5% 0% 5% 10%
2012e -5% -3% 0% 3% 5% 2013e -39% -19% 0% 19% 37%
Net
pro
fit
2014e -42% -21% 0% 20% 40%
Source: HSBC estimates
Liquidity and balance sheet Gearing
The company’s gearing ratio (excluding restricted
cash) stood at 71% at the end of 2011. There was
an aggregate amount of unpaid land premium of
RMB5bn at the end of 2011. Assuming no new
acquisition in 2012, we expect gearing to reach
77% in 2012-13, before declining to 65% in 2014.
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Historical and project net gearing
(%)
7177 77
65
49
0
20
40
60
80
100
2010 2011 2012e 2013e 2014e
Source: Company data, HSBC estimates
Source and use
For 2012, we assume contracted sales of
RMB27.1bn, applying a business tax of 5.5% and
a cash collection rate of 95%, in line with the
company’s historical average. Our cash flow
analysis shows a net use of cash of RMB2.1bn,
assuming no new land acquisitions for the year.
2012e source and use analysis (RMBm)
2012e
Source of funds Cash on hand 8,650 Collection from 2012 sales 24,000 Rental revenue less expense 1,600 Use of funds Construction costs 14,500 Unpaid land premium 5,000 Finance cost 2,280 Tax & LAT expenses 2,500 SG&A expenses 1,900 Distribution to PCS, PSS 737 Dividend 762 Net cash position 6,571
Source: HSBC estimates
The company also carried RMB14.5bn in short-
term loans that need to be refinanced. Among
those, we counted RMB4.4bn term loans,
RMB4.1bn trust loans and RMB6bn in
construction loans. The company raised a new
USD600m term loan in June; the proceeds will be
used to pay off the 2009 term loan when it comes
due in September. The company has indicated that
it has received consent from the lender to extend
the trust loans, as well as refinancing the
construction loans under new projects.
With cash on hand of RMB8.7m and the ability to
roll over most on-shore loans, we don’t see an
immediate need for fundraising, although gearing
will rise in the near term.
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Land bank of 23.5m sqm GFA, sufficient for near to medium-term development As of June 2012, the company had a total
development potential of 23.5m sqm GFA with
attributable GFA of 20m sqm, including
completed units for sale or held for investment,
investment properties under development and land
for development. The current land bank is more
than sufficient to sustain operations in the near to
medium term.
Total land bank
Approx Approx total Remaining total GFA saleable GFA land bank (m sqm) (m sqm) (m sqm)
Completed properties held for sale
4.1 3.6 0.6
Properties under development
11.2 9.3 11.1
Properties held for future development
11.8 9.5 11.8
Total 27.1 22.4 23.5
Source: Company data
We define development potential as floor space
that can be offered for sale and hence contribute
to future earnings. The outstanding premium on
land purchased through the auction/tender/listing
process is usually settled by instalments. We
believe there are no major issues preventing the
company from securing the full titles (land-use
rights certificates) and therefore have included the
projects on which it has not yet obtained land use
rights in our land bank analysis.
Land bank biased towards PBR and NE regions; mostly residential projects The current land bank is heavily biased towards
projects in the Pan Bohai Rim and Northeast
Region. These two regions account for 71% and
85% of the total land bank by GFA and GAV,
respectively.
While the company has been diversifying into the
commercial space for the purpose of building a
portfolio of investment properties, residential
projects still account for 83% and 86% of the land
bank by GFA and GAV, respectively.
Land bank analysis
Land bank of 23.5m sqm GFA with attributable interest of 20m
sqm; estimated aggregate land cost of RMB3,062/sqm
Land bank distributed across 54 projects and 19 cities; 62% of
GFA located in tier-2 cities
Residential projects account for 83% by GFA and 86% by GAV;
PBR and Northeast account for 71% by GFA and 85% by GAV
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Land bank by geographical location
PBR
47%
YRD
19%
PRD
10%
Beijing
11%
NE
13%
PBR=Pan Bohai Rim, YRD=Yangtze River Delta & Along Yangtze River, PRD=Pan Pearl River Delta and NE= Northeast Region Source: Company data
Land bank GFA by type
Commercial17%
Res83%
Source: Company data
Land bank GAV by region
PBR
55%Northeast
30%
YRD
11%
Western
3%
Central
0%
Southern
1%
Source: Company data
GAV by type
Residential86%
Commercial9%
Hotel5%
Source: Company data
Land bank GFA by city tier
Tier -3
19%
Tier -1
19%
Tier -2
62%
Source: Company data
Land bank GFA breakdown
Properties
held for
future devt.
48%
Properties
under devt.
35%
Completed
properties
held for
sale
17%
Properties
held for
future devt.
48%
Properties
under devt.
35%
Completed
properties
held for
sale
17%
Source: Company data
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Sino-Ocean Land (3377 HK) Real Estate 9 October 2012
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Company background Incorporated and listed in 2007, Sino-Ocean
develops mid-range to high-end residential
properties, premium office and retail space, and
hotels in China. Its origin can be tracked back to
COSCO Real Estate Development Corp
(COSRED Corp), which was established as an
SOE in 1993, and was a real estate management
and investment vehicle for the COSCO Group.
Sinochem Group became a major shareholder in
2002. Sino-Ocean introduced six new investors
in 2006: Morgan Stanley Real Estate Special
Situations Fund 3, Standard Chartered Bank,
IFR, Talent Ocean, Merrill Lynch and Credit
Suisse Group. Pacific Alliance also acquired an
equity interest in Sino-Ocean the same year.
After major shareholding restructuring in 2010,
China Life became the largest shareholder of
the group, with NFD being the second largest.
Company overview
Founded in 1993, listed in 2007, with China Life and Nan Fung
Development as major shareholders
Strong presence in the Pan Bohai Rim and Northeast Region
Experienced management, and high-quality products and services
Group structure (as of 31 August 2012)
14.04%
Sino-Ocean Land Holdings Limited (3377)
Sino-Ocean Land Limited Sino-Ocean Land (Hong Kong) Limited
24.76% 61.20%
China Life Insurance Company Limited Nan Fung Group Public Shareholders
Business Divisions and Subsidiary Companies
100% 100%
14.04%
Sino-Ocean Land Holdings Limited (3377)
Sino-Ocean Land Limited Sino-Ocean Land (Hong Kong) Limited
24.76% 61.20%
China Life Insurance Company Limited Nan Fung Group Public Shareholders
Business Divisions and Subsidiary Companies
100% 100%
Source: Company data
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Since its listing, Sino-Ocean has grown its land
bank from 9m sqm attributable GFA in six cities
in 2007 to about 21m sqm attributable GFA
(total land bank 24m sqm GFA) across 19 cities
as of December 2011.
Over the past 20 years, Sino-Ocean has
established a strong presence in Beijing and the
Pan Bohai Rim region, where it has 14m sqm
GFA (or about 60% of land bank). Sino-Ocean
has a completed investment property portfolio
of 0.32m sqm GFA in Beijing and Shanghai.
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Summary of management team
Name Age Years at group
Current job responsibility
Executive Directors Li Ming 48 15 Current role – Chairman of the board and the Chairman of Investment Committee of the board of the company
Past roles in Sino-Ocean – General Manager and Chief Executive Officer Roles in other companies/subsidiaries – Mr Li serves as the Chairman, legal representative, a Director or a General
Manager of a number of Sino-Ocean’s subsidiaries and project companies. Qualification – Mr Li graduated in July 1985 from Jilin Industrial University with a degree in Motor Vehicle
Transportation. He has a Master’s degree in Business Administration from the China Europe International Business and obtained a senior engineer qualification.
Wang Xiaoguang 48 4 Current role –Chief Operating Officer of the company Past roles in Sino-Ocean – na Roles in other companies/subsidiaries – Mr Wang serves as Chairman and/or legal representative of a number of
Sino-Ocean’s subsidiaries and project companies. Qualification – Mr Wang graduated in July 1986 from Jilin Industrial University with a degree in Machinery. In June
2005, he obtained a Master’s degree in Business Administration from Dongbei University of Finance and Economics. Chen Runfu 47 17 Current role – Vice President and a member of the Investment Committee of the board of the company
Past roles in Sino-Ocean – na Roles in other companies/subsidiaries – Mr Chen serves as a Director or a General Manager of a number of Sino-
Ocean’s subsidiaries and project companies. Qualification – Mr Chen graduated in July 1986 from Dalian Institute of Technology with a degree in Harbour and
Channel Engineering; In September 2005, he obtained a Master’s degree in Business Administration from the China Europe International Business School.
Non-Executive Directors Liu Hui 42 3 Current role – General Manager of Investment management of China Life & Non-Executive director
Past roles in Sino-Ocean – na Roles in other companies – General Manager and Deputy General Manager of China Life Insurance Asset
Management Company Limited and a division head of the headquarters of China Construction Bank. In February 2009, she was appointed General Manager of investment management department of China Life Insurance Company Limited (“China Life”).
Qualification – Ms Liu graduated in July 1992 from the Renmin University of China in Economics. In June 2000, she obtained a Master’s degree in Business Administration from the Tsinghua University.
Yang Zheng 42 1 Current role – General Manager of finance department & Non-Executive director
Past roles in Sino-Ocean –.na
Roles in other companies – In July 2005, Mr Yang joined China Life as assistant to the General Manager of finance department. In October 2006 he was promoted to Deputy General Manager. Since March 2009, he was General Manager for the finance department of China Life. Before joining China Life, he worked at China North Industries Corp from August 1993 to August 1998. Mr Yang also worked at Molex Inc. in USA from July 2000 to June 2005 as senior financial analyst.
Qualification – Mr Yang graduated in 1993 from Beijing University of Technology. In 2000, he obtained a Master’s degree in Business Administration from Northeastern University.
Cheung Vincent Sai Sing 31 1 Current role – Director of Nan Fung Development & Non- Executive director
Past roles in Sino-Ocean – na
Roles in other companies – Director of Nan Fung Development since 2009. Before this, he was a vice president at Barclays Capital Asia Limited (2008-2009) and Citigroup Global Markets Asia Limited (2004-2008).
Qualification – Mr Cheung graduated in 2003 from the University of California, Berkeley with a degree in Molecular and Cell Biology.
Independent Non-Executive Directors
Name Age Years at Group
Current job responsibility
Tsang Hing Lun 62 5 Current role – Chairman of the audit committee, Member of the Investment Committee of the board of the company and Non-Executive director
Past roles in Sino-Ocean – na Roles in other companies – Mr Tsang currently act as an Independent Non-Executive director and Chairman of audit
committee of Sinotrans Shipping Limited, Beijing Media Corporation Limited and China Rongsheng Heavy Industries Group Holdings Limited. He is also an Independent Non-Executive director of China GrenTech Corporation Limited. He also served in a senior management capacity in several public listed companies: Assistant General Manager in Hang Seng Bank; Vice President in UOB Group; an executive director of China Champ Group in 1994, as an alternate Chief Executive and a Deputy General Manager of the China Construction Bank, Hong Kong Branch.
Qualification – Mr Tsang graduated in 1973 from Chinese University of Hong Kong with a degree in Business Administration.
Summary of management team background
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Summary of management team
Name Age Years at group
Current job responsibility
Gu Yunchang 67 5 Current role – Member of the audit committee, Remuneration and Nomination Committee and the Investment Committed of the Board of the Company & Non-Executive Director
Past roles in Sino-Ocean – na Roles in other companies – Mr Gu acts as an Independent Director of E-House (China) Holdings Limited and
Independent Non-Executive director of Shimao Property Holdings Limited. He also served as Vice-President and the secretary general of China Real Estate Association. In 2006, he was appointed Vice-Chairman of the China Real Estate Association Research in PRC.
Qualification – na Han Xiaojing 57 5 Current role – Chairman of Remuneration and Nomination Committee; Member of the audit committee and the
Investment Committee of the Board of the Company & Non-Executive Director Past roles in Sino-Ocean – na Roles in other companies – Mr Han currently serves as an independent director of Shenzhen Overseas Chinese Town
Holding Company. He has been an independent non-executive director of Far East Horizon Limited and a supervisor of Beijing Capital International Airport Company Limited.
Qualification – In 1985, Mr Han received his Master’s degree in Law from the China University of Political Science and Law.
Zhao Kang 63 5 Current role – Member of the Remuneration and Nomination Committee and the Investment Committed of the Board of the Company & Non-Executive Director
Past roles in Sino-Ocean – na Roles in other companies – Mr Zhao currently serves as a member of the Eleventh Committee of the Chinese People’s
Political Consultative Conference and has been an independent director of Beijing Capital Co. Ltd. Qualification – Mr Zhao graduated in 1975 from the Department of Construction at the Tsinghua University.
Senior Management
Name Age Years at Group
Current job responsibility
Li Jianbo 49 3 Current role – Vice President Past roles in Sino-Ocean– na Roles in other companies – Mr Li was the Chairman and an Executive director of Gemini Investments (Holdings)
Limited. Qualification – Mr Li graduated in July 1985 from the Tsinghua University with a degree in Computer Engineering. In
August 2000, he obtained a Master’s degree in Business Administration from the State University of New Jersey . Xu Li 50 15 Current role – Vice President
Past roles in Sino-Ocean– na
Roles in other companies – na
Qualification – Mr Xu graduated in December 1992 from the Liaoning Radio and Television University with a degree in Industrial and Residential Construction; In September 2000, he obtained Master’s degree in Business Administration from Cheung Kong Graduate School of Business.
Zhou Tong 48 9 Current role – Vice President Past roles in Sino-Ocean –na Roles in other companies – na Qualification – Mr Zhou graduated in July 1986 from the Tongji University with a degree in Architecture. In September
2009, he obtained a Master’s degree in Business Administration from the China Europe International Business School. Sum Pui Ying, Adrian 50 5 Current role – Chief Financial Officer and Company Secretary
Past roles in Sino-Ocean – na Roles in other companies – Mr Sum act as a Chairman and a Non-Executive Director of Gemini Investments
(Holdings) Limited. Qualification – Mr Sum graduated in 1988 from the Hong Kong Polytechnic University with a degree in Accounting. In
1991, he obtained a Master’s degree in Business Administration from the University of Wales, and was awarded a Diploma in Legal Studies from the University of Hong Kong in 1996.
Chen Zuyuan 50 9 Current role – Vice President Past roles in Sino-Ocean – na Roles in other companies – na Qualification – Mr Chen graduated in July 1983 from the Hunan University with a degree in Industrial and Civil
Construction. In September 2006, he obtained a Master’s degree in Business Administration from the China Europe International Business School.
Lu Zhijun 43 3 Current role – Vice President Past roles in Sino-Ocean – na Roles in other companies – na Qualification – In June 2006, Mr Lu obtained a Master’s degree in Business Administration from the Dongbei University
of Finance and Economics. Source: Company data
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Recent changes to CIRC rules governing real estate investment by insurance companies
Appendix
Changes to CIRC rules related to real estate investments
Sep 5, 2010, Circular 80 July 25, 2012, Circular 59
Solvency ratio 8.4 No less than 150% 1.1 No less than 120% Net earning 8.5 Greater than RMB100mn 1.1 No requirement Cap on total real estate related investments
14.1 An insurance company's investments in non self use real estate or real estate related financial products cannot exceed 10% of the total assets of the preceding quarter. In addition, investments in real estate related financial products are subject to a cap of 3%.
1.9 An insurance company's investments in non self use real estate, infrastructure projects or real estate related financial product cannot exceed 20% of the total assets of the preceding quarter. In addition, non self use real estate investments are subject to a cap of 15%, while infrastructure projects or real estate related financial products are subject to a cap of 20%.
Cap on total investment in a single project
14.2 Investments in any single real estate project cannot exceed 50% of the total project expenditure. Investments in real estate related financial products cannot exceed 20% of the total issuance.
1.9 An insurance company's investments in non self use real estate, infrastructure projects cannot exceed 50% of total investment in the project; investment in real estate related financial products cannot exceed 20% of the total issuance. However, collective investments from affiliated parties (parent, subsidiary) can reach 60% of the total issuance.
Cap on shareholder loans
Not specified 2.4 If an insurance company is an equity investor in a project, the project company can use its assets as collaterals to obtain shareholder loans from the insurance company, assuming the amount is less than 40% of the project's total investment.
Source: CIRC
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Sino-Ocean Land (3377 HK) Real Estate 9 October 2012
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Notes
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Sino-Ocean Land (3377 HK) Real Estate 9 October 2012
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Notes
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Disclosure appendix Analyst Certification The following analyst(s), economist(s), and/or strategist(s) who is(are) primarily responsible for this report, certifies(y) that the opinion(s) on the subject security(ies) or issuer(s) and/or any other views or forecasts expressed herein accurately reflect their personal view(s) and that no part of their compensation was, is or will be directly or indirectly related to the specific recommendation(s) or views contained in this research report: Derek Kwong and Phillip Zhong
Important disclosures
Stock ratings and basis for financial analysis HSBC believes that investors utilise various disciplines and investment horizons when making investment decisions, which depend largely on individual circumstances such as the investor's existing holdings, risk tolerance and other considerations. Given these differences, HSBC has two principal aims in its equity research: 1) to identify long-term investment opportunities based on particular themes or ideas that may affect the future earnings or cash flows of companies on a 12 month time horizon; and 2) from time to time to identify short-term investment opportunities that are derived from fundamental, quantitative, technical or event-driven techniques on a 0-3 month time horizon and which may differ from our long-term investment rating. HSBC has assigned ratings for its long-term investment opportunities as described below.
This report addresses only the long-term investment opportunities of the companies referred to in the report. As and when HSBC publishes a short-term trading idea the stocks to which these relate are identified on the website at www.hsbcnet.com/research. Details of these short-term investment opportunities can be found under the Reports section of this website.
HSBC believes an investor's decision to buy or sell a stock should depend on individual circumstances such as the investor's existing holdings and other considerations. Different securities firms use a variety of ratings terms as well as different rating systems to describe their recommendations. Investors should carefully read the definitions of the ratings used in each research report. In addition, because research reports contain more complete information concerning the analysts' views, investors should carefully read the entire research report and should not infer its contents from the rating. In any case, ratings should not be used or relied on in isolation as investment advice.
Rating definitions for long-term investment opportunities
Stock ratings HSBC assigns ratings to its stocks in this sector on the following basis:
For each stock we set a required rate of return calculated from the cost of equity for that stock’s domestic or, as appropriate, regional market established by our strategy team. The price target for a stock represents the value the analyst expects the stock to reach over our performance horizon. The performance horizon is 12 months. For a stock to be classified as Overweight, the potential return, which equals the percentage difference between the current share price and the target price, including the forecast dividend yield when indicated, must exceed the required return by at least 5 percentage points over the next 12 months (or 10 percentage points for a stock classified as Volatile*). For a stock to be classified as Underweight, the stock must be expected to underperform its required return by at least 5 percentage points over the next 12 months (or 10 percentage points for a stock classified as Volatile*). Stocks between these bands are classified as Neutral.
Our ratings are re-calibrated against these bands at the time of any 'material change' (initiation of coverage, change of volatility status or change in price target). Notwithstanding this, and although ratings are subject to ongoing management review, expected returns will be permitted to move outside the bands as a result of normal share price fluctuations without necessarily triggering a rating change.
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Sino-Ocean Land (3377 HK) Real Estate 9 October 2012
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*A stock will be classified as volatile if its historical volatility has exceeded 40%, if the stock has been listed for less than 12 months (unless it is in an industry or sector where volatility is low) or if the analyst expects significant volatility. However, stocks which we do not consider volatile may in fact also behave in such a way. Historical volatility is defined as the past month's average of the daily 365-day moving average volatilities. In order to avoid misleadingly frequent changes in rating, however, volatility has to move 2.5 percentage points past the 40% benchmark in either direction for a stock's status to change.
Rating distribution for long-term investment opportunities
As of 08 October 2012, the distribution of all ratings published is as follows: Overweight (Buy) 47% (28% of these provided with Investment Banking Services)
Neutral (Hold) 38% (26% of these provided with Investment Banking Services)
Underweight (Sell) 15% (20% of these provided with Investment Banking Services)
Share price and rating changes for long-term investment opportunities
Sino Ocean Land Holdings (3377.HK) Share Price performance HKD Vs HSBC
rating history
1
3
5
7
9
11
13
15
Oct
-07
Oct
-08
Oct
-09
Oct
-10
Oct
-11
Oct
-12
Source: HSBC
Recommendation & price target history
From To Date
N/A Overweight (V) 09 November 2009 Overweight (V) Neutral (V) 22 March 2010 Neutral (V) Underweight (V) 23 July 2010 Underweight (V) N/A 30 August 2010 Target Price Value Date
Price 1 10.50 09 November 2009 Price 2 9.50 30 December 2009 Price 3 7.24 22 March 2010 Price 4 5.50 23 July 2010 Price 5 N/A 30 August 2010
Source: HSBC
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HSBC & Analyst disclosures Disclosure checklist
Company Ticker Recent price Price Date Disclosure
SINO OCEAN LAND HOLDINGS 3377.HK 4.49 05-Oct-2012 7Source: HSBC
1 HSBC* has managed or co-managed a public offering of securities for this company within the past 12 months. 2 HSBC expects to receive or intends to seek compensation for investment banking services from this company in the next
3 months. 3 At the time of publication of this report, HSBC Securities (USA) Inc. is a Market Maker in securities issued by this
company. 4 As of 31 August 2012 HSBC beneficially owned 1% or more of a class of common equity securities of this company. 5 As of 31 August 2012, this company was a client of HSBC or had during the preceding 12 month period been a client of
and/or paid compensation to HSBC in respect of investment banking services. 6 As of 31 August 2012, this company was a client of HSBC or had during the preceding 12 month period been a client of
and/or paid compensation to HSBC in respect of non-investment banking securities-related services. 7 As of 31 August 2012, this company was a client of HSBC or had during the preceding 12 month period been a client of
and/or paid compensation to HSBC in respect of non-securities services. 8 A covering analyst/s has received compensation from this company in the past 12 months. 9 A covering analyst/s or a member of his/her household has a financial interest in the securities of this company, as
detailed below. 10 A covering analyst/s or a member of his/her household is an officer, director or supervisory board member of this
company, as detailed below. 11 At the time of publication of this report, HSBC is a non-US Market Maker in securities issued by this company and/or in
securities in respect of this company Analysts, economists, and strategists are paid in part by reference to the profitability of HSBC which includes investment banking revenues.
For disclosures in respect of any company mentioned in this report, please see the most recently published report on that company available at www.hsbcnet.com/research.
* HSBC Legal Entities are listed in the Disclaimer below.
Additional disclosures 1 This report is dated as at 09 October 2012. 2 All market data included in this report are dated as at close 08 October 2012, unless otherwise indicated in the report. 3 HSBC has procedures in place to identify and manage any potential conflicts of interest that arise in connection with its
Research business. HSBC's analysts and its other staff who are involved in the preparation and dissemination of Research operate and have a management reporting line independent of HSBC's Investment Banking business. Information Barrier procedures are in place between the Investment Banking and Research businesses to ensure that any confidential and/or price sensitive information is handled in an appropriate manner.
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Banks
Europe Robin Down Analyst, Global Sector Head, Banks +44 20 7991 6926 [email protected]
Monica Patrascu +44 20 7991 6828 [email protected]
Peter Toeman +44 20 7991 6791 [email protected]
Rob Murphy +44 20 7991 6748 [email protected]
Iason Kepaptsoglou +44 20 7991 6722 [email protected]
Lorraine Quoirez +44 20 7991 6667 [email protected]
Johannes Thormann Global Head of Exchanges +49 211 910 3017 [email protected]
CEEMEA Gyorgy Olah Head of Ceemea Banks Research +44 20 7991 6709 [email protected]
Aybek Islamov +44 20 7992 3624 [email protected]
Tamer Sengun +90 212 376 46 15 [email protected]
Jan Rost +27 11 676 4209 [email protected]
Latin America Victor Galliano +1 212 525 5253 [email protected]
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Mariel Santiago Financials +1 212 525 5418 [email protected]
Felipe Rodrigues +55 11 3847 9029 [email protected]
Asia Todd Dunivant Analyst, Head of Banks, Asia-Pacific +852 2996 6599 [email protected]
York Pun +852 2822 4396 [email protected]
Eric Mak +852 2996 6585 [email protected]
Kathy Park +82 2 3706 8755 [email protected]
Sachin Sheth +91 22 2268 1224 [email protected]
Tejas Mehta +91 22 2268 1243 [email protected]
Kar Weng Loo +65 6658 0621 [email protected]
Xiushi Cai +65 6658 0617 [email protected]
Bruce Warden +8862 6631 2868 [email protected]
Insurance
Europe Kailesh Mistry Analyst, Head of European Insurance +44 20 7991 6756 [email protected]
Dhruv Gahlaut +44 207 991 6728 [email protected]
Steven Haywood +44 207 991 3184 [email protected]
Thomas Fossard +33 1 56 52 43 40 [email protected]
Asia James Garner Analyst, Head of Asian Insurance +852 2822 4321 [email protected]
Michael Chang +852 2996 6555 [email protected]
Grace Zhou +852 2822 3053 [email protected]
Sinyoung Park +822 3706 8770 [email protected]
Real Estate
Europe John Fraser-Andrews Head of Real Estate Equity Research, Europe +44 20 7991 6732 [email protected]
Thomas Martin +49 211 910 3276 [email protected]
Stéphanie Dossmann +33 1 56 52 43 01 [email protected]
Asia Derek Kwong Head of Real Estate Equity Research, Asia +852 2996 6629 [email protected]
Ashutosh Narkar +91 22 2268 1474 [email protected]
Michelle Kwok +852 2996 6918 [email protected]
Phillip Zhong +852 2996 6535 [email protected]
Perveen Wong +852 2996 6571 [email protected]
Stanley Cheung +852 2822 4395 [email protected]
Pratik Burman Ray +65 6658 0611 [email protected]
David Choo +65 6658 0612 [email protected]
Abel Lee +8862 6631 2866 [email protected]
CEEMEA Levent Bayar +90 212 376 46 17 [email protected]
Credit Research Banks and Insurance
Asia Dilip Shahani Analyst, Head of Global Research, Asia-Pacific +852 2822 4520 [email protected]
Devendran Mahendran Sovereigns and Financial Institutions +852 2822 4521 [email protected]
North America Van Hesser Global Head of Credit Research, US Banks +1 212 525 3114 [email protected]
Arjun Bowry Associate +1 212 525 3119 [email protected]
Specialist Sales Nigel Grinyer +44 20 7991 5386 [email protected]
Martin Williams +44 20 7991 5381 [email protected]
Juergen Werner +49 211 910 4461 [email protected]
Jonathan Weetman +44 20 7991 5939 [email protected]
Matthew Robertson +44 20 7991 5077 [email protected]
Global Financial Institution Group Research Team Carlo Digrandi Global Head of Financial Institutions Research +44 20 7991 6843 [email protected]