研究报告全文：MN20Mar2023CMBInternationalGlobalMarketsEquityResearchCompanyUpdateLongfor960HKTransitionleavinggrowthmutedHOLDDownWethinkLongforsstrategyshiftintosafetywouldcontinuetoleaveitlaggingTargetPriceHK249behindthoseSOEpeersin2023EOntheDPsidethelackofeffectivelandbankonly225mnsqmexclYantaiandsoldbutunbookedGFAwouldputsalesPreviousTPHK5259outlookunderpressureespeciallyin2023Eguided-3YoYAlsomanagementUpDownside149willnotexpandtotaldebtsforlandacquisitionwhichlimitsthesalesupsideinarecoverymarketOntheIPsideshoppingmallbusinessisalsotransitingintoCurrentPriceHK2185anasset-lightmodel6of11mallsin2023EwhichmaynegativelyimpactrentalChinaPropertygrowthmomentumto15-25YoYin2023-25Evspreviousexpectationof30CAGRSothatwouldputitsgrowthmutedespecially2023Eearningsat-9JeffreyZENGYoYWecutTPtoHKD249shareanddowngradetoHoldItscurrentlytradingat08xPBstillatapremiumoverSOEplayerslikeCOLI05x85239163727jeffreyzengcmbicomhkLackofsellableresourceswouldlimititssalesoutlookduringtheconferencecallmanagementguidedRMB195bnsalestargetin2023EbasedonRMB300bnsellableresourcesand65sell-throughrateThisMiaoZHANGmeansa3YoYdeclinecomparedtoRMB202bnin2022Wethinkthe85237618910keydragisitsdecliningqualityofthelandbankamongits40mnsqmzhangmiaocmbicomhkofattributablelandbanktherewas10mnsqmalreadysoldbutunbookedGFA14868attributableratioand75mnsqminYantaithathasbeenBellaLIveryhardtosellsince2015Sotheeffectivelandbankwasonly225mn85237576202sqmorRMB350bnattributablesellableresourceswhichisat27yearsofbellalicmbicomhk2022salesAlsomanagementconfirmsnottoleverageupthisyeartoacquiremorelandssothereislimited2023EsalesupsideandbeyondWeStockDatathinkitwillputitsrevenuebookingunderpressurewith-14YoYin2023EMktCapHKmn737028Shoppingmalltransitionintoasset-lightmodelwouldslowdownrentalAvg3mthstoHKmn246growthAmongthe15mallopeningsin20223areviaasset-lightmodel52wHighLowHK43151000Thisnumberwilldoublein2023Eto6or55oftotalnumberofmallTotalIssuedSharesmn33731openingsWethinkthiswouldnegativelyimpacttherentalincomegrowthSourceFactSetfromprevious30CAGRto15-25in2023-25EbasedonourestimatesInthemediumtermthistransitionmayevenlowertheprobabilityofhavingShareholdingStructureC2-C5contributing50ofcoreearningsin5yearsCharmTalentIntlLtd4302022earningsin-lineCompanydeliveredcoreprofitsofRMB225bnJunsonDevelopment22005YoYimplying5YoYdeclinein2H22TotalrevenueincreasedbySourceHKEx12YoYbutGPmargindecreasedto212-4pptYoYmainlydraggedbyDPbusinessat179GPMThankstocostsavingcoreNPMwasonlySharePerformancedown1pptYoYto9Dividendpayoutratiowascutto30inlinewithAbsoluteRelativeguidanceandthefull-yeardividendwasRMB113share6dividendyield1-mth-108-46but2023EprofitoutlooknotpromisingManagementguidedasteady3-mth-153-156coreearningsgrowthinthefutureHoweverwethink2023Ewillbestillunder6-mth-222-253challengeas1DPrevenuebookingwillbeunderminedby30YoYsalesSourceFactSetdeclinein2022Thisisreflectedbythesharpdeclinein2022contractliability12-mthPricePerformancetoRMB124bn-36YoYandonlyRMB227bnsoldbutunbookedrevenue-28YoY2Rentalgrowthfromshoppingmallwouldslowdowngivenmorethan50ofthemallopeningsareviaasset-lightmodel3GPMisunlikelytoimprovegiventhebadpropertymarketin2022Soallinallwethink2023Eprofitwoulddecline9YoYmainlyon10YoYdropinrevenue-13YoYdeclineinDPrevenueand25YoYinrentalincomeDowngradetoHoldandCutTPtoHK249WeuseNAVmodel65discounttoderiveTPofHK249basedontheeffectivelandbankof225mnsqmandattributablenetmarginof11UpsidecatalystsSalesSourceFactSetbeatPMspin-offDownsidecatalystplacementEarningsSummaryYE31DecFY21AFY22AFY23EFY24EFY25ERevenueRMBmn223375250565226655234176242764YoYgrowth210122-953337NetincomeRMBmn2385424362205982299725495EPSRMB405408344384426YoYgrowth18709-157116109ConsensusEPSRMBNANA405450409PEx4747554945PBx0908080605Yield8959546167ROE191171134129111Netgearing456583397314149SourceCompanydataBloombergCMBIGMestimatesPLEASEREADTHEANALYSTCERTIFICATIONANDIMPORTANTDISCLOSURESONLASTPAGE1MOREREPORTSFROMBLOOMBERGRESPCMBRGOORhttpwwwcmbicomhk20Mar2023Managementguidance1EarningsguidanceanddividendpolicyManagementexpectsasteadycoreearningsgrowthinthefutureandguides30dividendpayoutratio22023EMarketoverviewManagementexpectssalesrecoverytosustainin2023EbutwithupsanddownsThedivergencebetweenhigh-tierandlow-tiercitiesarestillobvious2023Esalesareveryunlikelytogobacktopeaklevelin2021andLongforwillcontinuetofocusonmajor20citiesPolicysupportisstillnecessaryatacitylevelbasedonitscommunicationwithlocalgovernments32023EsalestargetLongforhaspreparedRMB300bnsellableresourceswith65sell-throughrateThiswouldimply10salesYoYgrowthtoreachRMB195bn4SalesASPYTDLongforhasraised1-3citybycitytomarktothecurrentmarket5LeverageLongforwillnotincreasealltotaldebtsin2023EsowillrelyonitsC2-C5businessestodrivethegrowthandprofitabilityInfiveyearsmanagementtargetsC2-C5tocontribute50netprofits6LandacquisitionsLongfors2022landacquisitionswereimpactedbythelower-than-expectedcashcollectionratesoitwaslaggingbehindLongforwillbemoreproactivethisyearandmatchwiththesalesscale7USratehikeLongforhashedged98ofitsinterestrateexposuretoUSDyieldAlsoithasenoughsupportfromdomesticbanksandfinancingindustrythathasdrivenitsaverageborrowingcostto41YTDbankscontinuetovisitLongfortoshowsupportforhigh-qualityPOEssoittargetstolowerUSDdebtportionto18in2023from23in20228PlacementLongforhasnoplantodoplacementasinvestorsconfidenceisnotbackItwillkeepaneyeonthemarket9C-REITsItisstilltargetingsocialhousingandinfrastructuressodeveloperslikeLongforarenotthekeybeneficiaryTheremaybescopeextensiontoincludeserviceapartmentandshoppingmallbutthecoreforLongforistoimprovetheassetturns10PMspin-offItisnottherighttimenowPLEASEREADTHEANALYSTCERTIFICATIONANDIMPORTANTDISCLOSURESONLASTPAGE220Mar2023Figure1LongforsFY22earningsinlinewithmarketexpectationSourceCompanydataCMBIGMDevelopmentbusinessstillunderpressure1Managementexpects2023EcontractedsalestoreachRMB195bn-3YoYbasedonRMB300bnsellableresourcesand65sell-throughrateWethinkthisisbelowmarketexpectationofpositivegrowth2HoweverthisisnotreallyasurpriseasithaslaggedbehindmajorpeersmainlySOEonlandacquisitionsin2023EFigure3at25landacquisitionsalesratioAlsomanagementisnotwillingtoleverageupitsbalancesheetsowedonotexpectlandacquisitionstopickupstronglytodrivehighgrowthamidastillrecoveringmarket3Its75mnsqmoflandbankinYantaicontributes19oftotalattributablelandbankswhicharehardtosellThiswillalsodragitseffectivesellableresources4WeexpectbookingGPMtoremaindepressedin2023Eat16vs179in2022reflectingthebadmarketin2022Itmaystarttorecoverin2024Eand2025EFigure22023EsalestargetatRMB195bn-3YoYSourceCompanydataCMBIGMPLEASEREADTHEANALYSTCERTIFICATIONANDIMPORTANTDISCLOSURESONLASTPAGE320Mar2023Figure3Longforssalesandlandacquisitionslaggedbehindtheindustryin2022whichmaydragitssalesrecoverySourceCompanydataCMBIGMFigure4therewas75mnsqmofattributablelandbankinYantaithathasbeenhardtosellsince2015SourceCompanydataCMBIGMPLEASEREADTHEANALYSTCERTIFICATIONANDIMPORTANTDISCLOSURESONLASTPAGE420Mar2023Figure5Yantaionlysold20mnsqmin2022withASPdrop50YoYSourceCompanydataCMBIGMShoppingmalltransitingintoassetlightmodelAmongall15mallopeningsin2022E3ofthemareviaasset-lightmodelThenumberofsuchmodelwilldoublein2023Eto6or55oftotalnumberofmallopeningsin2023EThiswouldhaveanimpactontherentalincomegrowthmomentumfrom30CAGRto15-25in2023-25EbasedonourestimatesThereforetheearningscontributionfromIPmayslowdownin2023EandbeyondFigure6Longformallsaretransitingintoasset-lightmodelsSourceCompanydataCMBIGMPLEASEREADTHEANALYSTCERTIFICATIONANDIMPORTANTDISCLOSURESONLASTPAGE520Mar2023EarningsoutlookToreflectaboveweforecasted2023Erevenuetodecline10YoYreachingRMB226bnmainlydueto13declineYoYinDPbusiness2022salesdown30YoYand25YoYgrowthinrentalincomeGPMmaystayrelativelystableYoYat21andthuscorenetprofitisestimatedtodecline10duetotoplinepressureFigure7LatestforecastrevisionYoYRMBmnFY23EFY24EFY25EFY23EFY24EFY25ERevenue226655234176242764-953337GrossProfit469835150956206-1149691Netprofit205982299725495-86116109Gross212223-04ppt13ppt12pptMarginNetMargin9198105-06ppt07ppt07pptSourceCMBIGMestimatesDowngradetoHoldandNewTPofHKD249shareBelowshowsourNAVcalculationmethodusingNAVdiscountof65ThiswouldimplyatargetpriceofHKD249shareanditsequivalentto63x2023EPEand09xPBLongforiscurrentlytradingat55x2023EPEand08xPBwhichisstillatapremiumoverSOEplayerslikeCOLI05xPBPLEASEREADTHEANALYSTCERTIFICATIONANDIMPORTANTDISCLOSURESONLASTPAGE620Mar2023Figure8NAVcalculationLongforNAVcalculationattributablelandbankmnsqm293Exclthosesoldbutunbooked2022ASPRMBsqm15451ASPassumption-2023E0-2024E0-2025E0-2026E0LandcostRMBsqm6500ExclYantaislowlandcostConstructioncostRMBsqm5000InterestRMBsqm500Constructioncostassumption-2023E2-2024E2-2025E2-2026E2SGASales52023E2024E2025E2026ESalesvolumemnsqm7778ASP15451154511545115451AttributableSalesvalueRMBbn108108108129COGS868687100SGA5556Tax5546Profits12121116DCF1211916NAVofcurrentlandbankRMBbn48IP188AttributableEquity142TotalNAV378DiscounttoNAV65HKDRMB09TargetpriceHKDshare249SourceCMBIGMestimatesPLEASEREADTHEANALYSTCERTIFICATIONANDIMPORTANTDISCLOSURESONLASTPAGE720Mar2023FinancialSummaryINCOMESTATEMENT2020A2021A2022A2023E2024E2025EYE31DecRMBmnRevenue184547223375250565226655234176242764Costofgoodssold130517166835197527179672182667186558Grossprofit540315654153038469835150956206Operatingexpenses611290866029542155235594Sellingexpense11821735765725827988Adminexpense7294108216794614663506583Operatingprofit436244199141671363764062745057Otherincome19221735765725827988Otherexpense503454645338518653585555EBIT436244199141671363764062745057Interestexpense106146158138128123Pre-taxprofit463704762745822376594192046356Incometax17529158391299999081093712006Aftertaxprofit288403178832823277523098334349Minorityinterest883879358461715379878854Netprofit200022385424362205982299725495Corenetprofit186882243822542205982299725495Netdividends8393100206741617968997649BALANCESHEET2020A2021A2022A2023E2024E2025EYE31DecRMBmnCurrentassets576776644388540238508109527421559920Cashequivalents7782888535726248233292986114671Restrictedcash000000Accountreceivables307403746629820269742786928891Inventories381776413943331320287476292267298493Othercurrentassets86433104445106474111327114298117864Non-currentassets188383231263246536261049275729290409PPE152916961350135013501350Deferredincometax88671089111217112171121711217InvestmentinJVsassos181352674729186291862918629186Intangibles21424032196219621962196Othernon-currentassets147392369824712247122471224712Totalassets765159875651786774769158803150850329Currentliabilities399508446543335875326005327502329448Short-termborrowings183381158520657206572065720657Accountpayables11321613418593448898369133393279Taxpayable333533701433611336113361133611Othercurrentliabilities522126888462983629836298362983Contractliabilities182389194874125176118917118917118917Non-currentliabilities172926207231217720191419191419175262Long-termborrowings149029178139187866161565161565145408Othernon-currentliabilities238972909229854298542985429854Totalliabilities572435653773553595517424518921504710Sharecapital527529546546546546Retainedearnings96609113213130346141748166256218792Totalshareholdersequity192724221878233179251734284229345619Minorityinterest84380969289107998232106219115073Totalequityandliabilities765159875651786774769158803150850329PLEASEREADTHEANALYSTCERTIFICATIONANDIMPORTANTDISCLOSURESONLASTPAGE820Mar2023CASHFLOW2020A2021A2022A2023E2024E2025EYE31DecRMBmnOperatingProfitbeforetaxation463704762745822376594192046356Depreciationamortization428854199141671363764062745057Taxpaid15615158971436999081093712006Changeinworkingcapital168118331201673682041895302Others260131028012997154731844522010Netcashfromoperations367302853220621792504443450247InvestingCapitalexpenditure146311821612427150001500015000Acquisitionofsubsidiariesinvestments405276147614237700Others227212290222902229022290222902Netcashfrominvesting414034873242943402793790237902FinancingDividendpaid745991029305653661246675Netborrowings13727261611880026301016156Proceedsfromshareissues16111320000Others147901537215372153721537215372Netcashfromfinancing2089731298248661746692477459NetchangeincashCashatthebeginningoftheyear60782770068810490648112153127933Exchangedifference000000Cashattheendoftheyear770068810490648112153127933132820GROWTH2020A2021A2022A2023E2024E2025EYE31DecRevenue222210122953337Grossprofit6446621149691Operatingprofit653708127117109EBIT653708127117109Netprofit9119321155116109PROFITABILITY2020A2021A2022A2023E2024E2025EYE31DecGrossprofitmargin293253212207220232Operatingmargin236188166160173186ReturnonequityROE111115107858681GEARINGLIQUIDITYACTIVITIES2020A2021A2022A2023E2024E2025EYE31DecCurrentratiox141416161617VALUATION2020A2021A2022A2023E2024E2025EYE31DecPB191711070605Divyield414942546067SourceCompanydataCMBIGMestimatesNoteThecalculationofnetcashincludesfinancialassetsPLEASEREADTHEANALYSTCERTIFICATIONANDIMPORTANTDISCLOSURESONLASTPAGE920Mar2023DisclosuresDisclaimersAnalystCertificationTheresearchanalystwhoisprimaryresponsibleforthecontentofthisresearchreportinwholeorinpartcertifiesthatwithrespecttothesecuritiesorissuerthattheanalystcoveredinthisreport1alloftheviewsexpressedaccuratelyreflecthisorherpersonalviewsaboutthesubjectsecuritiesorissuerand2nopartofhisorhercompensationwasisorwillbedirectlyorindirectlyrelatedtothespecificviewsexpressedbythatanalystinthisreportBesidestheanalystconfirmsthatneithertheanalystnorhisherassociatesasdefinedinthecodeofconductissuedbyTheHongKongSecuritiesandFuturesCommission1havedealtinortradedinthestockscoveredinthisresearchreportwithin30calendardayspriortothedateofissueofthisreport2willdealinortradeinthestockscoveredinthisresearchreport3businessdaysafterthedateofissueofthisreport3serveasanofficerofanyoftheHongKonglistedcompaniescoveredinthisreportand4haveanyfinancialinterestsintheHongKonglistedcompaniescoveredinthisreportCMBIGMRatingsBUYStockwithpotentialreturnofover15overnext12monthsHOLDStockwithpotentialreturnof15to-10overnext12monthsSELLStockwithpotentiallossofover10overnext12monthsNOTRATEDStockisnotratedbyCMBIGMOUTPERFORMIndustryexpectedtooutperformtherelevantbroadmarketbenchmarkovernext12monthsMARKET-PERFORMIndustryexpectedtoperformin-linewiththerelevantbroadmarketbenchmarkovernext12monthsUNDERPERFORMIndustryexpectedtounderperformtherelevantbroadmarketbenchmarkovernext12monthsCMBInternationalGlobalMarketsLimitedAddress45FChampionTower3GardenRoadHongKongTel85239000888Fax85239000800CMBInternationalGlobalMarketsLimitedCMBIGMisawhollyownedsubsidiaryofCMBInternationalCapitalCorporationLimitedawhollyownedsubsidiaryofChinaMerchantsBankImportantDisclosuresTherearerisksinvolvedintransactinginanysecuritiesTheinformationcontainedinthisreportmaynotbesuitableforthepurposesofallinvestorsCMBIGMdoesnotprovideindividuallytailoredinvestmentadviceThisreporthasbeenpreparedwithoutregardtotheindividualinvestmentobjectivesfinancialpositionorspecialrequirementsPastperformancehasnoindicationoffutureperformanceandactualeventsmaydiffermateriallyfromthatwhichiscontainedinthereportThevalueofandreturnsfromanyinvestmentsareuncertainandarenotguaranteedandmayfluctuateasaresultoftheirdependenceontheperformanceofunderlyingassetsorothervariablemarketfactorsCMBIGMrecommendsthatinvestorsshouldindependentlyevaluateparticularinvestmentsandstrategiesandencouragesinvestorstoconsultwithaprofessionalfinancialadvisorinordertomaketheirowninvestmentdecisionsThisreportoranyinformationcontainedhereinhavebeenpreparedbytheCMBIGMsolelyforthepurposeofsupplyinginformationtotheclientsofCMBIGMoritsaffiliatestowhomitisdistributedThisreportisnotandshouldnotbeconstruedasanofferorsolicitationtobuyorsellanysecurityoranyinterestinsecuritiesorenterintoanytransactionNeitherCMBIGMnoranyofitsaffiliatesshareholdersagentsconsultantsdirectorsofficersoremployeesshallbeliableforanylossdamageorexpensewhatsoeverwhetherdirectorconsequentialincurredinrelyingontheinformationcontainedinthisreportAnyonemakinguseoftheinformationcontainedinthisreportdoessoentirelyattheirownriskTheinformationandcontentscontainedinthisreportarebasedontheanalysesandinterpretationsofinformationbelievedtobepubliclyavailableandreliableCMBIGMhasexertedeveryeffortinitscapacitytoensurebutnottoguaranteetheiraccuracycompletenesstimelinessorcorrectnessCMBIGMprovidestheinformationadvicesandforecastsonanASISbasisTheinformationandcontentsaresubjecttochangewithoutnoticeCMBIGMmayissueotherpublicationshavinginformationandorconclusionsdifferentfromthisreportThesepublicationsreflectdifferentassumptionpoint-of-viewandanalyticalmethodswhencompilingCMBIGMmaymakeinvestmentdecisionsortakeproprietarypositionsthatareinconsistentwiththerecommendationsorviewsinthisreportCMBIGMmayhaveapositionmakemarketsoractasprincipalorengageintransactionsinsecuritiesofcompaniesreferredtointhisreportforitselfandoronbehalfofitsclientsfromtimetotimeInvestorsshouldassumethatCMBIGMdoesorseekstohaveinvestmentbankingorotherbusinessrelationshipswiththecompaniesinthisreportAsaresultrecipientsshouldbeawarethatCMBIGMmayhaveaconflictofinterestthatcouldaffecttheobjectivityofthisreportandCMBISwillnotassumeanyresponsibilityinrespectthereofThisreportisfortheuseofintendedrecipientsonlyandthispublicationmaynotbereproducedreprintedsoldredistributedorpublishedinwholeorinpartforanypurposewithoutpriorwrittenconsentofCMBIGMAdditionalinformationonrecommendedsecuritiesisavailableuponrequestForrecipientsofthisdocumentintheUnitedKingdomThisreporthasbeenprovidedonlytopersonsIfallingwithinArticle195oftheFinancialServicesandMarketsAct2000FinancialPromotionOrder2005asamendedfromtimetotimeTheOrderorIIarepersonsfallingwithinArticle492atodHighNetWorthCompaniesUnincorporatedAssociationsetcoftheOrderandmaynotbeprovidedtoanyotherpersonwithoutthepriorwrittenconsentofCMBIGMForrecipientsofthisdocumentintheUnitedStatesCMBIGMisnotaregisteredbroker-dealerintheUnitedStatesAsaresultCMBIGMisnotsubjecttoUSrulesregardingthepreparationofresearchreportsandtheindependenceofresearchanalystsTheresearchanalystwhoisprimaryresponsibleforthecontentofthisresearchreportisnotregisteredorqualifiedasaresearchanalystwiththeFinancialIndustryRegulatoryAuthorityFINRATheanalystisnotsubjecttoapplicablerestrictionsunderFINRARulesintendedtoensurethattheanalystisnotaffectedbypotentialconflictsofinterestthatcouldbearuponthereliabilityoftheresearchreportThisreportisintendedfordistributionintheUnitedStatessolelytomajorUSinstitutionalinvestorsasdefinedinRule15a-6undertheUSSecuritiesExchangeActof1934asamendedandmaynotbefurnishedtoanyotherpersonintheUnitedStatesEachmajorUSinstitutionalinvestorthatreceivesacopyofthisreportbyitsacceptancehereofrepresentsandagreesthatitshallnotdistributeorprovidethisreporttoanyotherpersonAnyUSrecipientofthisreportwishingtoeffectanytransactiontobuyorsellsecuritiesbasedontheinformationprovidedinthisreportshoulddosoonlythroughaUS-registeredbroker-dealerForrecipientsofthisdocumentinSingaporeThisreportisdistributedinSingaporebyCMBISingaporePteLimitedCMBISGCompanyRegnNo201731928DanExemptFinancialAdviserasdefinedintheFinancialAdvisersActCap110ofSingaporeandregulatedbytheMonetaryAuthorityofSingaporeCMBISGmaydistributereportsproducedbyitsrespectiveforeignentitiesaffiliatesorotherforeignresearchhousespursuanttoanarrangementunderRegulation32CoftheFinancialAdvisersRegulationsWherethereportisdistributedinSingaporetoapersonwhoisnotanAccreditedInvestorExpertInvestororanInstitutionalInvestorasdefinedintheSecuritiesandFuturesActCap289ofSingaporeCMBISGacceptslegalresponsibilityforthecontentsofthereporttosuchpersonsonlytotheextentrequiredbylawSingaporerecipientsshouldcontactCMBISGat6563504400formattersarisingfromorinconnectionwiththereportPLEASEREADTHEANALYSTCERTIFICATIONANDIMPORTANTDISCLOSURESONLASTPAGE10