【公司研究】世茂地产(813 HK)– 股价上升后已反映未来

We change our recommendation to HOLD after 33% share price surging YTD. We believe its valuation is priced-in the future. We maintain our earnings forecast unchanged but raise end-20E NAV forecast to HK$40.92 to reflect the spin-off plan for property management business. As a result, we raise TP from HK$26.54 to HK$28.64, based on 30% discount to NAV.

HOLD after 33% share price surging YTD. Share price of Shimao soared 33.5% YTD. We believe investors like its robust contracted sales growth. We raise our end-20E NAV forecast to HK$40.92 per share after factor in property management business. We adjust upward TP from HK$26.54 to HK$28.64. Recommendation is changed to HOLD.

45% growth in contracted sales in 10M19. In 10M19, contracted sales amount and area increased by 45% to RMB197.2bn and 33% to 11.00mn sq m, respectively. Hit rate was 94% by Oct based on RMB210bn sales target. The Company increased its saleable resources to RMB300bn properties in 2H19. It is because the Company acquired some properties assets from Tahoe (000732 CH) and Guangdong Yuetai (600393 CH) in the early of the year and launched them for sales in 2H19. We expect robust sales growth will be sustainable in 2020 due to ample saleable resources.

Acquired RMB200bn+ saleable resources from Tahoe and Guangdong Yuetai. Shimao acquired 60 projects with 14.21mn sq m land bank in RMB78.8bn in 1H19. The Company acquired assets from high gearing companies. It acquired 13 projects (RMB150bn worth estimated saleable resources) from Tahoe and 6 projects (RMB48bn worth estimated saleable resources) from Guangdong Yuetai. These assets can provide an estimated 10%+ net margin.

Spin off property management and hotel businesses. Management disclosed that they are planning to spin off property management and hotel businesses in coming 2 years. We estimate value of property management and hotel businesses to be HK$10bn and HK$20bn, respectively. The success of spin off will further enhance NAV.

No share placement plan. Some property companies have conducted share placements recently. Although share price of Shimao is in 10-year high, Jason Hui (Vice Chairman) denied any share placement plan at current time.

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