欢迎访问网贷财经！ 电话 4008937218

　　机构：交银国际

　　Earnings beat plus special dividend: FY17 core profit rose 81% YoY to HK$6.6bn, 17%/22% higher than consensus/our forecast. The company declared a 2H17 DPS of HK$0.90 and special DPS of HK$0.15, bringing total FY17 DPS to HK$1.50. 

　　Major property sales booking in FY17: Two major projects were booked during the period, namely Mantin Heights and Bloomsway, versus a low base in 2016 with no major project booked. Sales pace was faster than we had expected, as the two projects were already 71% and 87% sold, respectively. HK property sales revenue hit HK$20.6bn, a record high for the company. Nevertheless, gross margin remained low at only 15% as expected , dragged by the high land cost. On the other hand, mainland property profit also rose 15% YoY, in line with its rebound in mainland contracted sales since 2016. 

　　Rental growth from new projects: Mainland net rental income rose 14% YoY to HK$2.7bn, driven by the full-year contribution from Hangzhou Kerry Centre . On a like-for-like basis, we estimate mainland net rental income rose 4% YoY in RMB terms. We expect 2018-19 to be a ramp-up period for existing projects, before Shenyang Kerry Centre Phase II and Qianhai Kerry Centre kick in revenue by 2020E. HK net rental income rose 4.8% YoY, and we expect it to remain steady in 2018, with contribution from newly-added serviced apartments offset by the rental pressure in Kowloon East and Island East, in our view. 

　　Running out of HK landbank: We believe overall FY17 results were solid, but have front-loaded the growth for the next two years. While management still targets HK$16bn contracted sales for 2018E, we believe such a target may be at risk given its depleting HK landbank, while its saleable resources from inventory and upcoming Beacon Hill project add up to only HK$11bn in 2018E, under our estimates. We remain cautious on its profit margin, which remains low at only 18-25% for 2018-19E, also dragged by high land cost. 

　　Dilemma between growth and profitability: Management indicated that they might slow down the sales pace, in order to protect profit margin. With a slower property sales pipeline, we maintain our forecast that core profit will retreat to the HK$5.5bn mark in 2018-19. Moreover, in spite of management’s target in continuous dividend growth over time, we believe dividend growth may be stalled in the next two years, as the company is accelerating its investment in new projects, and intends to maintain a low gearing. The stock is trading at a 45.4% discount to its NAV of HK$64.80/share, which we believe is fair to reflect its slow asset turnover and low-yielding mainland rental properties. We maintain our Neutral rating and a target price of HK$35.60, based on a 45% target NAV discount.   

靠谱众投 kp899.com：您放心的投资理财平台，即将起航!