中國房地產市場分析報告(英文)(pdf 56頁)

Play on second-tier cities. In 2006-2007, we expect higher
growth potential in second-tier cities/Shenzhen than in other firsttier
cities. We believe developers with existing landbank in these
cities will maximize NAV accretion. Sector policy risk remains high
near term. We initiate a Neutral coverage view; top pick: COLI.
Initiate sector with Neutral coverage view; prefer COLI (Outperform)
We believe developers that have existing exposure in second-tier cities and Shenzhen will be
able to capture the higher growth potential in these markets, which will translate into faster
NAV accretion in 2006-2007. We prefer China Overseas Land (COLI, OP), and estimate that
44% of the company’s end-2006E GAV and half of its 2006E-2007E profits will be generated
from second-tier cities and Shenzhen, compared with the sector averages of 33% and 22%.
We expect average 24%/32% price rises in 2nd-tier/Shenzhen in 2006-2007
Affordability in most second-tier cities is generally better than in first-tier cities, which we
believe will drive faster urbanization and resettlement. We expect an average 24% price rise
in 2006-2007 for most second-tier cities. Given limited supply and increasing affordability,
we forecast a 32% price increase in Shenzhen during the same period.
Second-tier cities less vulnerable to near-term risks than first tier
Although policy risk is high in all geographical regions, we believe growth in second-tier
cities will be less affected by government policies than that in first-tier cities.……
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