仍然看好中國(guó)房地產(chǎn)

1、February 19, 2019 09:03 PM GMTFebruary 19, 2019 09:03 PM GMTChina Property | Asia PacificStillBullishonChinaPropertyWereiterateAttractiveviewtheChinaProperty industrythankstopolicyrelaxationandattractivevaluations. Onthecreditside,wearetaperingdownbullishviewas valuationisturningfairseetechnicalsand

2、easingcreditMORGAN STANLEY ASIA LIMITED+Elly ChenEQUITY ANALYST HYPERLINK mailto:Elly.Chen Elly.ChenKelvin PangSTRATEGIST HYPERLINK mailto:Kelvin.Pang Kelvin.PangChloe LiuEQUITY ANALYST HYPERLINK mailto:Chloe.Liu1 Chloe.Liu1Cara ZhuRESEARCH ASSOCIATE HYPERLINK mailto:Cara.Zhu Cara.Zhu+8523963-0122+8

3、522848-8204+8522848-5497+8522848-7117conditions remaining supportive.China-SustainablepolicyrelaxationandnocutsinceJan2019:WereiterateourAttractiveviewonChinaPropertyindustry, andbelevethepolcyhasbottomednSeptember01.SnceJanuary,severalMorgan Stanley appreciates your support in the 2019 Institutiona

4、l Investor All-Asia Research Team Survey. HYPERLINK /ranking-assistance Request your ballot.ChinaPropertyAsia Pacificcitieslaunchedfine-tuningpolicies,including:1)Nanjing,GuangzhouandHaikouIndustryViewAttractiverelaxedHukoupolicy;2)ZhuhaiandHangzhourelaxedonsocialsecurityfor HomePurchaseRestrictions

5、(HPR);3)Jiangmennowprovidinghomepurchase discounttotalent;and4)morecitieshaveloosenedonawindowguidancebasis without any official announcements. We believe the policy relaxation to be sustainableandmorecity-levelrelaxationsmayfollow,aslocalgovernmentsare facingrisingpressureonlandsalesandeconomicgrow

6、th.Basedonourchannel checks,developershavenotseenanyincrementalpricecutstheproperty marketsnceJanuary019,venpolcyrelaatonandcredteasn.ValuationstillSectorvaluationstilllooksquiteattractive,ourview, wth1-monthforward/Eatonly597xhstorcalaveraesnce010:796;- 1SD:Wepreferstockswith:(1)highexposuretotier1

7、&2citiestobenefit frompolicyrelaxation;decentcashflowsandfinancingabilitytoweatherthe downcycle;(3)strongsalesandearningstoofferpositivecatalysts;and(4)cheap valuations.OurtoppicksareSunac,CIFIandFutureLandsmall-to-midcaps, andVankeHamonglargecaps(YTDperformanceExhibit5).Credit-Fundingconditionsfort

8、heChinaHY:ChnasJanuarybroadcredtrowthreboundedmuchmorethanthe marketexpectedto11.4%Y(from10.6%YDecember2018),whichshowsthat onshorecreditconditionshaveimprovedandsupportiveoftheChinaHY propertysector.Inaddition,theChinaHYpropertysectorsawrecordsupplyboththeonshoreandoffshoredollarcorporatebondmarket

9、.Thatsaid,despite thestrongdollarbondsupply(US$14billionissuanceversusUS$15billionof redemptions),demandoutweighedsupply,whichdroveChinaHYproperty spreadssignificantlytighter(-169bp).Webelievethatthereroomfordemand toincreasefurtherandthereforeweneedtomonitorsupply.TaperingdownourbullishviewonChinaH

10、YandChinaHYGiventhe strongrallyChinaHYandChinaHYproperty,wefeelthatvaluationlooking fairbutnotexpensive.BetweenChinaHYandChinaIG,wefavourChinaHY. Despitethegoodfundingconditionsmentionedabove,wecontinuetobelieve thatthisnotarisingtideliftsallboats”scenario.Hence,creditselection remainskeytoinvestors

11、investmentprocess.KelvinPangafixedincomestrategistandnot opiningonequitysecurities.Hisaredelineated.Due to the nature of the fixed income market, the issuers or bonds of the issuers recommended or discussed this report not be continuously followed. Accordingly, investors must regard this report prov

12、iding stand-alone and should not expect continuing or additional reports relating to such issuers or bonds of the issuers.Morgan Stanley does and to do business with companiesinMorganStanleyResearch.Asa result,investorsshouldbeawarethatthefirmmayhavea conflict of that could the objectivity of Morgan

13、 Stanley Research. should consider MorganStanleyasonlyasinglefactorinmaking their investmentdecision.ForanalystandotherimportantrefertotheSection,locatedattheendofthis report.+=Analystsemployedbynon-U.S.affiliatesarenotregisteredwith FINRA,maynotbeassociatedpersonsofthememberandmaynot besubjectNASD/

14、NYSErestrictionsoncommunicationswitha subjectcompany,publicappearancesandtradingsecuritiesheldby a research analystaccount.China Property: Reiterate AttractiveViewElly Chen, Chloe Liu, Cara ZhuWe reiterate our Attractive view on China Property, driven by policy relaxation and attractive valuations.

15、We initiated coverage on the China Property industry on January 2 ( HYPERLINK /eqr/article/webapp/09de9e46-d5e6-11e8-9388-71fc4ae660a6?ch=rpint&sch=afr China Property: Key Drivers Turning Positive). Share prices for the sector have rebounded 11% on average YTD. We see further upside from here, mainl

16、y driven by:Continuouspolicyrelaxations:WebelievethepolicyhasbottomedSeptember 2018, marked by central governments official comment to delay property tax legislation.Sincethen,overallcreditconditionshavebeenimprovingandsomelocal governmentshavebeenlooseningpropertypoliciestosomeextent.Whats new on p

17、olicy: We note some policy fine-tuning since January 2019, e.g. Nanjing HYPERLINK /eqr/article/webapp/e1eac498-3105-11e9-bf97-dd6aceba4315?ch=rpint&sch=ar relaxed Hukou policy (China NOW: Nanjing relaxed Hukou policy - buying home can help Hukou application), Guangzhou and Haikou relaxed Hukou polic

18、y, Zhuhai and Hangzhou relaxed on social security for HPR, Jiangmen provides home purchase discounts to talent. We think more city-level relaxations could follow, as local governments are facing rising pressure on land sales and economic growth.Whatsnewonthemarket:Basedonourchannelchecks,developersh

19、avenot seenanyncrementalprcecutsnthepropertymarketsnceJanuary019,venpolcy relaxationandcrediteasing( HYPERLINK /eqr/article/webapp/3251a7ac-0fe7-11e9-8ef6-6b19b155ce50?ch=rpint&sch=ar ChinaCyclicalsCorporateDayTakeaways).Exhibit 1: Leading indicators of China property share pricesSource: CREIS, Bloo

20、mberg, Morgan Stanley Research. Note: Red means policy tightening, green means policy looseningExhibit 2: Property and credit lead property sales volumes, price, land sales, and new startsPolicyASP m-mLand y-yyScore1m12citiescities124%8%2%5%4%9%Source: CEIC, Wind, CREIS, Morgan Stanley Research. Not

21、e: Red means downcycle, and green means upcyclevaluations:Sectorvaluationstilllooksquiteattractivetous,with12- monthforwardP/Eatonly5.97x(historicalaveragesince2010:7.96x;-1SD:We preferstockswith:(1)highexposuretotier1&2citiestobenefitfrompolicyrelaxations;decentcashflowsandfinancingabilitytoweather

22、thedowncycle;(3)strongsales andearningstoofferpositivecatalysts;and(4)cheapvaluations.Ourtoppicksare Sunac,CIFIandFutureLandsmall-to-midcaps,andVankeHamonglargecaps.Exhibit 3: Industry 12-month forward P/E 8642Source: Bloomberg, Morgan Stanley Research. Pricing date as of 15 Feb, 2019.Exhibit 4: Ind

23、ustry P/B Source: Bloomberg, Morgan Stanley Research. Pricing date as of 15 Feb, 2019.Exhibit5: Sharepriceperformance2019GZR&FFuture LandSunac CIFI19%24%22%27%Exhibit 6: Share price performance to 2018 peak81%70%68%58%81%70%68%58%55%52%40%32%28%25%24%20%19%12%11%9%Agile Country GZR&FVanke Vanke A Co

24、untry Agile LoganHang SengIndexCOLISino SZ InvestmentLongfor Shimao -3% CR Land-3%13%11%10%9%9%8%8%6%6%2%VankeACIFIVanke SZInvestmentShimao Sunac Future Logan HangSengLongfor CRCOLI-5%0%5%10%15%20%25%30%Source: Bloomberg, Morgan Stanley Research. Pricing date as of 15 Feb, 2019.0%20%40%60%80%100%Sou

25、rce: Bloomberg, Morgan Stanley Research. Pricing date as of 15 Feb, 2019.Exhibit 7: Sector valuation summaryStockTickerUpsideRatingP/EP/BNAVYield2017A2018E2019E2020E2017A2018E2H18E2019EAgile3383 HK5,03010.088.93-11%UW4.21.00.922.33-55%137%7.1%10.3%CIFI884 HK4,9054.976.5131%OW13.02-62%141%4.6%7.9%COL

26、I688 HK40,40528.9531.7810%OW42.38-32%28%2.3%4.3%2007 HK28,90010.4813.1325%OW8.02.11.626.26-60%80%3.1%6.4%CR Land1109 HK25,69329.1035.0220%OW10.89.01.346.69-38%65%3.4%4.5%Future Land1030 HK4,9826.6310.1253%OW22.48-71%282%5.1%7.1%GZ R&F2777 HK6,18215.0612.41-18%EW31.02-51%191%6.2%11.8%Logan3380 HK7,47

27、310.6813.0923%OW18.71-43%94%2.8%7.6%Longfor960 HK18,01923.8031.3432%OW6.01.81.544.78-47%90%2.9%5.3%Shimao813 HK8,55920.3525.1524%OW41.92-51%114%3.6%6.4%Sino-Ocean3377 HK3,5613.673.13-15%UW6.25-41%112%4.6%11.5%Sunac1918 HK17,49931.1543.0138%OW71.68-57%273%2.5%3.7%SZ Investment604 HK2,9462.742.11-23%U

28、W5.58-48%42%3.9%6.5%Vanke A42,05526.5528.578%EW38.09-30%50%3.9%4.8%Vanke H2202 HK43,14130.0532.277%OW43.03-30%50%3.9%4.7%Median9.01.51.3-50%103%3.8%6.5%Source: Bloomberg, company data, Morgan Stanley Research (E) estimates; Note: All stocks are traded in HKD, except Vanke A which is traded in Rmb. P

29、ricing date as of 15 Feb, 2019.creditstrategy:TaperingdownourbullishviewonChinaHY and China HYpropertyKelvin PangOneofthekeydriversofourbullishviewonChinaHYandChinaproperty(seeTurning BullshonsaCredt,January1,019)wasthatcredtcreatonnChnawouldmprove. esawChnasJanuarybroadcredtrowthreboundmuchmorethan

30、themarket expected, due to pass-through of recent policy easing measures and the Chinese New Yeareffectsee HYPERLINK /eqr/article/webapp/6242bea0-3004-11e9-bf97-dd6aceba4315?ch=rpint&sch=ar JanuaryCredt:olcyEasngStartstoork,ebruary15,019.Our China economic teams estimated broad credit growth (TSF -

31、equity financing + all government bonds) rebounded strongly to 11.4%Y (versus 10.6%Y December 2018; ExhibitAbouthalfofthegrowthuptickwascontributedbystrongerbankloans (contributing0.3pp totheheadlinereading),followedby governmentbonds(0.2pp)and corporate bond financing(0.1pp).Exhibit 8: China broad

32、credit growth rebounded for the first time since early 201518%13%Jan-19: 11.4%8%3%-2%Jan-13Jan-14Jan-15Jan-16Jan-17Jan-18Jan-19Source: CEIC, Morgan Stanley ResearchFrom Chinese corporates perspective, the bond market has never been this accommodatngsncecorporatedefaultsstartedtopckupnmd-017.ThsJanua

33、rysaw thelargestmonthlycorporatebondnetissuancesincelate2016(Exhibit9).Ona12- month trailing basis, China onshore corporate bond net issuance has been increasing since the lows late 2017 (Exhibit 10). The improvement onshore funding also benefitsourdollarbondChineseissuers.Forexample,year-to-dateons

34、horeissuanceby dollarbondChinapropertyissuerswasUS$3.2billion,which25%oflastyearstotal issuance.Exhibit9: JanuaryChinaonshorecorporatebondissuancethe highestthelast12months5815725815725915361290280213199 17176238 231107-17-98-7971-21-9-90MonthlyCorpBond bn) 54Exhibit10: Januarys12-monthtrailingonsho

35、recorporatebondnet issuancethehighestearly2017Lower Lower AAA12M bn)350250150-1502,5002,0001,5001,0005000Mar-17 Apr-17 Mar-17 Apr-17 Jun-17 Jul-17 Aug-17 Sep-17 Oct-17 Nov-17 Dec-17 Jan-18 Feb-18 Mar-18 Apr-18 Jun-18 Jul-18 Aug-18 Sep-18 Oct-18 Nov-18 Dec-18 Jan-19Feb-18Mar-18Apr-18Jun-18 Jul-18 Feb

36、-18Mar-18Apr-18Jun-18 Jul-18 Sep-18Oct-18Nov-18Dec-18Jan-19Source: Wind, Morgan Stanley ResearchInaddition,thepaceofcontractionshadowbankfinancingmoderatedatthemarginJanuarysbroadcredtrowthnumber,partlyonalowbase.Thssconsstentwthour viewthatthedragfromtheshrinkingofshadowbankingoncreditgrowthmuchlow

37、er 2019 compared 2018.Althoughwebelievethatbroadcreditgrowthwilllikelymoderateto11%Ybyend- Februaryduetothepaybackoffront-loadedloanandbondissuanceduetotheChinese NewYeareffect,wouldstillmarkthefirstmeaningfulreboundoverthepast18 months.WecontinuetoexpectChinabroadcreditgrowthtoendtheyearhigherat 12

38、.5%Y,whichgoingtobesupportiveofChinacredit.Despiteconditions,wecontinuebelievethatthisisnota“atide liftsallboats”scenario.Thebroadnumberonlytakesoutthe tail such as a mass default but it doesnt take out idiosyncratic suchasadefaultoracompanyrunningintoliquidityrisk.Hence, selectionkeyDemand for cred

39、it outweighs supply for nowTheAsiacredit(+2.3%)andChinaHYproperty(+4.7%)sectorsstrongpositiveyear-to- datetotalreturnpartlydrivenbythedramaticchangethetechnicallandscape.At theendoflastyear,Asiacreditinvestorswereworriedaboutoversupplyanddemand forcreditwasreallyweak(seeWaitingfortheBottomtoBeBullis

40、h,November,25, 2018).However,sincethestartoftheyearsupplyhasbeenratherdisappointing.JanuarysnetssuanceforsacredtsonlyUS$14bllon,downfromUS$5bllonfor thesameperiodlastyear(Exhibit11).Thisdespitethestrongsupplythatweseefrom theChinaHYpropertysector.TheChinaHYpropertysectorsyear-to-dategrosssupply clos

41、etoUS$14billion,whichmoreorlessenoughtorefinanceitstotalredemptions 2019(Exhibit12).ThekeydriverofthelowernetissuanceIGcorporates,where rosssupplysdownasmuchas%nJanuary.Exhibit 11: Asia credit net issuance is down US$11 billion compared to the same period last yearCumulative Total Net Issuance for A

42、sia Credit ( USD Billion)Cumulative Total Net Issuance for Asia Credit ( USD Billion)80706050403020100Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov DecSource: EMDB, Bloomberg, Morgan Stanley ResearchExhibit 12: China HY property developers are almost done with their 2019 refinancing needs4036307201471

43、00-2-5-4-30 2013 2014 2015 2016 2017 2018 2019 2020 2021Source: Bloomberg. Morgan Stanley ResearchAssupplybecomingscarce,wehavedemandstartingtopickup.BothAsiacreditfunds andEMhardcurrencyfundssawstronginflowsatthestartoftheyear.Ourproprietary safundflowtrackerEhbt1)showsJanuarynflowsofUS$16bllon47%o

44、f UM.Toputthenflowsntocontet,Januaryssacredtfundsnflowscancover4% of2018netoutflows.EMhardcurrencyfundinflowswereequallystrongwithtotal nflowsofUS$68bllon5%ofUM;Ehbt14.JusttheJanuarynflowsaloneforEM hardcurrencyfundsaremorethanenoughtocoverthenetoutflowsofEMhard currencyfunds2018.Hence,withthesharpc

45、hangefundflows,webelievethata lotoffundswerecaughtunderweightbetaandneedtoaddriskwhenthemarketrallies nJanuary.Exhibit13: fundssawthelargestmonthlyinflows2017Exhibit14: EMhardcurrencyfundssawthelargestinflowsJuly 20160 4.66%4.66%Sep-16 Oct-16 Sep-16 Oct-16 Nov-16 Dec-16 Jan-17 Feb-17 Mar-17 Apr-17 M

46、ay-17 Jun-17 Jul-17 Aug-17 Sep-17 Oct-17 Nov-17 Dec-17 Jan-18 Feb-18 Mar-18 Apr-18 May-18 Jun-18 Jul-18 Aug-18 Sep-18 Oct-18 Nov-18 Dec-18 Jan-19Million 4.0%3.0%of1.0%0.0%-1.0%-2.0%-3.0%Jul-17 Jul-18 FundFlows(USDMillion)-LHSAsiaCreditFundFlows(%ofAUM)-RHSSource: EPFR, Morgan Stanley ResearchFund Fl

47、ows (USD Million) -RHSEM Hard Currency Fund Flows (% of AUM) -LHSSource: EPFR, Morgan Stanley ResearchInaddition,Asiacreditfundshadbeenunderweightduration,giventhatwastheright positiontohave2018,whereAsiacreditproducednegativereturns.Ourcustom-made Asiacreditfunddurationtrackershowsthatfundsendedthe

48、yearwithextremelyshort durationcomparedtotheirhistoricalaverage(Exhibit15).ThedurationforAsiacredit fundsasoftheendoflastyearwas3.95years,whichmuchlowerthantheJACIindex durationofaround4.5years.Hence,besidesaddingbetatotheirportfolio,Asiacredit fundsalsoneedtoincreaseduration.Exhibit 15: Duration fo

49、r Asia credit funds was low going into start of the year4.4Duration (Years)4.3Duration (Years)3.9Jul-16 Aug-16 Sep-16 Oct-16 Jul-16 Aug-16 Sep-16 Oct-16 Nov-16 Dec-16 Jan-17 Feb-17 Mar-17 Apr-17 May-17 Jun-17 Jul-17 Aug-17 Sep-17 Oct-17 Nov-17 Dec-17 Jan-18 Feb-18 Mar-18 Apr-18 May-18 Jun-18 Jul-18

50、Aug-18 Sep-18 Oct-18 Nov-18 Dec-18SimpleAverageDurationLTAverageSource: Funds Factsheet, Morgan Stanley ResearchDemandfromprivatebanking(PB)clientshasalsobeenreallystrongatthestartofthe year.ThismakessenseastheyieldonChinaHYpropertywasashighas10-11%and Liborhadactuallycomedownduetothemarketturningmo

51、redovishontheFed.The pick-upyieldafterfundingcostsforPBclientswithoutleverageonChinaHYproperty bondscouldeasilygettothehighsingle-digitssuchas9%atthestartoftheyear.Ifwe add some leverage PB clients could get to low double-digit yields. However, we believe thattheattractivenessofthistradehasreducedsu

52、bstantiallypostthestrongrallyChnaHYpropertynJanuary.Thatsad,westllthnkthatthepck-upsdecentB clientsstillgeta7%pick-upoverLibor(closetothelevelattheendof2015),whichstillmuchhigherthanthelevelswesaw2016and2017.Exhibit 16: China HY property yield still looks okay for private wealth investorsChinaChinaH

53、YPropertyYield-3MLibor9%8%7% 6%5%4%Jan-15Sep-15May-16Jan-17Sep-17Jun-18Feb-19Source: Bloomberg, Morgan Stanley ResearchOnasidenote,wecouldalsoseeapick-updemandforAsiacreditIGcorporatebonds byTaiwaneseinsurersasthehedgingcostgettingcheaperforthem.Theyieldona long-datedBBBratedAsiacorporatebondafterhe

54、dgingforTaiwaneseinsurersnow 3.57%,slightlyaboveourestimatedyieldtargetof3.5%.Thisasignificantimprovement yieldcomparedtolastyear.Theaverageyieldpick-upafterhedgingforTaiwanese insurersforaBBBratedAsiacreditbondlastyearwasonly2.66%.Exhibit 17: Taiwanese insurers are finding dollar Asia credit more a

55、ttractive this year%Jun-17Oct-17Jan-18Jun-18Oct-18Feb-19 BBBLongDatedHedgeAnnual Yield1.5Source: Bloomberg, Morgan Stanley ResearchValuation no longer cheap but still fairGiventhestrongrallyChinaHY(-146bp)andChinaHYproperty(-169bp)year-to- date,valuationclearlynolongercheap.Thatsaid,wedothinkthatval

56、uationnot expensiveyetforbothassetclassesbutatafairlevel.ChinaHYpropertycurrently tradesat721bp,whichslightlytighterthanthehistoricalaverageof752bp(Exhibit18). Thecaveatforthesedatathatthehistoryabitshortandonlygoesbackto2014.UsingChinaHYasaproxy(sincetheChinapropertysectorthemaindriveranyway),muchm

57、oreclearthatvaluationlooksfair.ThecurrentChinaHYspread3bpwider thanthehistoricalaverage(Exhibit21).Exhibit 18: China HY property looks fair on a historical basisSpreads (bp)900Spreads (bp)800700600500400300Feb-14Dec-14Oct-15Aug-16Jul-17May-18ChinaHYProperty LTAverage(excluding2016&2017) CurrentSourc

58、e: iBoxx, Morgan Stanley ResearchWe continue prefer China HY over China IG despite China HYs overChinaIG(-120bpyear-to-date):Twokeyreasonsdriveourview. First,ChinaIGcurrentlylooksrichastrading14bptighterthanthehistoricalaverage (Exhibit20),whichmeanswecontinuetobecautiousonChinaIG.Second,webelieve t

59、hattherisk/rewardcontinuestofavourChinaHYasstilloffersadecentspreadpick- upoverChinaIGat493bp(versusthe486bphistoricalaverage;Exhibit19).Exhibit 19: China HY currently looks fair versus China IG800700600500400300200Feb-13 Nov-13 Aug-14 May-15 Feb-16 Nov-16 Aug-17 Jun-18ChinaHY-ChinaIG LTAverage(excl

60、uding2016&2017) CurrentSource: iBoxx, Morgan Stanley ResearchExhibit20: ValuationforChinaIGrich.Exhibit21: whileChinaHYfairSource: MorganStanleyResearchSource:MorganStanleyResearchValuation Methodology and Risks0884.HKOur price target of HK$6.51/share for CIFI is based on a 50% discount to our end-F