China Fortune Land Development (A)

China Fortune Land Development is engaged in the design, manufacture, installation and sale of thermostat and humidistat, cold storage and cold water units and other refrigeration equipments, fan coil pipes, air-conditioner and other air-conditioning terminal equipments, energy-conserved air purification systems, refrigerated containers and intelligent household central air-conditioning equipments; and provision of repair and maintenance and related information consultancy services. Through its subsidiaries, Co. is engaged in the provision of system integration services and sale of air-conditioning spare parts.
  • Ticker600340
  • ISINCNE000001GG8
  • ExchangeShanghai Stock Exchange
  • SectorConstruction & Materials
  • CountryChina

Analysts

UOB
Nick Liu Sunliang ...
  • Shaun Tan

China Fortune Land - 1H19: income increases but higher cash flow pressure, downgrade to SELL.

China Fortune Land reported net profit of Rmb8.48b in 1H19 (+22.4% yoy), in line with expectations. The decline in the sales volume of the real estate business has affected its cash flow and debt paying ability. At the same time, the continuous increase in account receivables has led to slow cash collection. Downgrade to SELL with a lower target price of Rmb23.34.

UOB
Eric Wang Zhen ...
  • Jayson Kong
  • Julia Pan Mengyao
  • K Ajith
  • Nick Liu Sunliang
  • Oscar Jiang
  • Robin Yuen
  • Shaun Tan

Greater China Daily: Monday, August 19, 2019

KEY HIGHLIGHTS CHINA Results BOC Aviation (2588 HK/HOLD/HK$65.75/Target: HK$69.00) 1H19: Admirable earnings growth amid concerns over B737 Max exposure. China Fortune Land (600340 CH/SELL/Rmb26.05/Target: Rmb23.34) 1H19: income increases but higher cash flow pressure, downgrade to SELL. Chongqing Rural Commercial Bank (3618 HK/SELL/HK$3.94/Target: HK$3.65) 1H19: Earnings boosted by lower staff cost. Update Kingdee (0268 HK/NOT RATED/HK$7.61) Profit meets consensus, but market weigh on from cloud transformation. HONG KONG Update Ausnutria Dairy (1717 HK/BUY/HK$11.08/Target: HK$1...

UOB
Chaiwat Arsirawichai ...
  • Chong Lee Len
  • Eric Wang Zhen
  • Jayson Kong
  • John Cheong Ming Chern
  • Jonathan Koh
  • Joohijit Kaur Jaztar Singh
  • Julia Pan Mengyao
  • K Ajith
  • Nick Liu Sunliang
  • Oscar Jiang
  • Robin Yuen
  • Shaun Tan
  • Stevanus Juanda
  • Tanaporn Visaruthaphong
  • Thunya Sutavepramochanon

Regional Morning Notes - Monday, August 19, 2019

CHINA Results BOC Aviation (2588 HK/HOLD/HK$65.75/Target: HK$69.00): 1H19: Admirable earnings growth amid concerns over B737 Max exposure. China Fortune Land (600340 CH/SELL/Rmb26.05/Target: Rmb23.34): 1H19: income increases but higher cash flow pressure. Downgrade to SELL. Chongqing Rural Commercial Bank (3618 HK/SELL/HK$3.94/Target: HK$3.65): 1H19: Earnings boosted by lower staff cost. Update Kingdee (0268 HK/NOT RATED/HK$7.61): Profit meets consensus, margin under pressure due to cloud transformation. HONG KONG Update Ausnutria Dairy (1717 HK/BUY/HK$11.08/Target: HK$16.00): Credible rebutta...

UOB
Nick Liu Sunliang ...
  • Shaun Tan

China Property - Weekly: Valuation of some developers will decline.

The decision from Politburo meeting emphasised continued policy tightening, and we believe the real estate industry will find it difficult to obtain a dividend policy in the short term. However, we still recommend paying attention to real estate developers whose sales will keep growing in the industry, as sales data now represents operating profit 2-3 years later. Maintain MARKET WEIGHT.

UOB
Nick Liu Sunliang ...
  • Shaun Tan

China Property - Weekly: 1H19 results preview.

Amid expectations of a decline in investment, China’s policy fine-tuning will play a key role in stabilising the market. We expect the profit gap between housing developers to widen and industry concentration to increase significantly when total sales volumes show a downtrend. At the same time, the sector’s valuations will fall, but leading developers’ valuations will rebound. Downgrade to MARKET WEIGHT.

UOB
Nick Liu Sunliang ...
  • Shaun Tan

China Fortune Land - 1H19: income increases but higher cash flow pressure, downgrade to SELL.

China Fortune Land reported net profit of Rmb8.48b in 1H19 (+22.4% yoy), in line with expectations. The decline in the sales volume of the real estate business has affected its cash flow and debt paying ability. At the same time, the continuous increase in account receivables has led to slow cash collection. Downgrade to SELL with a lower target price of Rmb23.34.

UOB
Chaiwat Arsirawichai ...
  • Chong Lee Len
  • Eric Wang Zhen
  • Jayson Kong
  • John Cheong Ming Chern
  • Jonathan Koh
  • Joohijit Kaur Jaztar Singh
  • Julia Pan Mengyao
  • K Ajith
  • Nick Liu Sunliang
  • Oscar Jiang
  • Robin Yuen
  • Shaun Tan
  • Stevanus Juanda
  • Tanaporn Visaruthaphong
  • Thunya Sutavepramochanon

Regional Morning Notes - Monday, August 19, 2019

CHINA Results BOC Aviation (2588 HK/HOLD/HK$65.75/Target: HK$69.00): 1H19: Admirable earnings growth amid concerns over B737 Max exposure. China Fortune Land (600340 CH/SELL/Rmb26.05/Target: Rmb23.34): 1H19: income increases but higher cash flow pressure. Downgrade to SELL. Chongqing Rural Commercial Bank (3618 HK/SELL/HK$3.94/Target: HK$3.65): 1H19: Earnings boosted by lower staff cost. Update Kingdee (0268 HK/NOT RATED/HK$7.61): Profit meets consensus, margin under pressure due to cloud transformation. HONG KONG Update Ausnutria Dairy (1717 HK/BUY/HK$11.08/Target: HK$16.00): Credible rebutta...

UOB
Nick Liu Sunliang ...
  • Shaun Tan

China Property: Supportive policies to drive valuation recovery. OVERWEIGHT

In the face of slowing economic growth, we expect further policy relaxation for the property sector in 2019. Mortgage rates are expected to fall further, supporting demand. Furthermore, the slowing pace of land purchases and a shortened development cycle should boost operating cash flow ratio to 1.6% this year. As the sector is still trading at a 27.5% discount to NAV, we re-initiate coverage with an OVERWEIGHT rating and our top pick is Sunac China Holdings (1918 HK).

Insider bought: A director bought 426,300 shares at 24.080CNY and

A director at Zhejiang King Refrigeration Industry bought 426,300 shares at 24.080CNY and the significance rating of the trade was 98/100. Is that information sufficient for you to make an investment decision? This report gives details of those trades and adds context and analysis to them such that you can judge whether these trading decisions are ones worth following. Included in the report is a detailed share price chart which plots discretionary trades by all the company's directors over the last two years clearly showing Close periods where trading activity is restricted under listin...

UOB
Eric Wang Zhen ...
  • Jayson Kong
  • Julia Pan Mengyao
  • K Ajith
  • Nick Liu Sunliang
  • Oscar Jiang
  • Robin Yuen
  • Shaun Tan

Greater China Daily: Monday, August 19, 2019

KEY HIGHLIGHTS CHINA Results BOC Aviation (2588 HK/HOLD/HK$65.75/Target: HK$69.00) 1H19: Admirable earnings growth amid concerns over B737 Max exposure. China Fortune Land (600340 CH/SELL/Rmb26.05/Target: Rmb23.34) 1H19: income increases but higher cash flow pressure, downgrade to SELL. Chongqing Rural Commercial Bank (3618 HK/SELL/HK$3.94/Target: HK$3.65) 1H19: Earnings boosted by lower staff cost. Update Kingdee (0268 HK/NOT RATED/HK$7.61) Profit meets consensus, but market weigh on from cloud transformation. HONG KONG Update Ausnutria Dairy (1717 HK/BUY/HK$11.08/Target: HK$1...

CHINA FORT.LD.DEV.CTD. with less fundamental stars is reduced to Neutral

CHINA FORT.LD.DEV.CTD. (CN), a company active in the Real Estate Holding & Development industry, loses a star(s) at the fundamental level and sees its general evaluation downgraded. The independent financial analyst theScreener just removed a fundamental star(s) for a 2 over 4-star rating. As such, market behaviour remains unchanged and is evaluated as moderately risky. theScreener believes that the loss of a star(s) merits downgrade to the general evaluation of the title, which passes to Neutral. As of the analysis date April 26, 2019, the closing price was CNY 30.58 and its expected value wa...

Ford Equity International Rating and Forecast Report

Ford Equity International Research Reports cover 60 countries with over 30,000 stocks traded on international exchanges. A proprietary quantitative system compares each company to its peers on proven measures of business value, growth characteristics, and investor behavior. Ford's three recommendation ratings buy, hold and sell, represent each stock’s return potential relative to its own country market.. The rating reports which are generated each week, include the fundamental details behind each recommendation and reflect the fundamental and price data as of the last trading day of the week...

UOB
Nick Liu Sunliang ...
  • Shaun Tan

China Property - Weekly: Valuation of some developers will decline.

The decision from Politburo meeting emphasised continued policy tightening, and we believe the real estate industry will find it difficult to obtain a dividend policy in the short term. However, we still recommend paying attention to real estate developers whose sales will keep growing in the industry, as sales data now represents operating profit 2-3 years later. Maintain MARKET WEIGHT.

UOB
Nick Liu Sunliang ...
  • Shaun Tan

China Property - Weekly: 1H19 results preview.

Amid expectations of a decline in investment, China’s policy fine-tuning will play a key role in stabilising the market. We expect the profit gap between housing developers to widen and industry concentration to increase significantly when total sales volumes show a downtrend. At the same time, the sector’s valuations will fall, but leading developers’ valuations will rebound. Downgrade to MARKET WEIGHT.

UOB
Nick Liu Sunliang ...
  • Shaun Tan

China Property - Weekly: Performances will continue to improve.

Last week (14-20 July), 32,842 new houses were sold in the 30 cities we monitor, down 11.46% wow. Transaction area totalled 3.49m sqm, down 10.17% wow. New inventory in 15 cities increased 9.42% wow. Transaction-to-new-launch ratio reached 0.97x, lower than the 1.30x in the week of 7-13 July. Leading developers are trading at 4.12-9.45x 2019F PE and at a 22.7-67.5% discount to last week's NAV. Maintain OVERWEIGHT.

UOB
Nick Liu Sunliang

China Property - Weekly: Financing channel may not tighten further.

Last week (7- 13 July), 37,011 new houses were sold in the 30 cities we monitor, down 6.0% wow. Transaction area totalled 3.87m sqm, down 6.1% wow. New inventory in 15 cities increased 61.3% wow. Transaction-to-new-launch ratio reached 1.30x, higher than the 0.75x in the week of 30 June-6 July. Leading developers are trading at 4.1-9.2x 2019F PE and at a 21.4-65.2% discount to NAV last week. Maintain OVERWEIGHT.

UOB
Nick Liu Sunliang

China Property - Weekly: Trust financing will face tighter policies.

Last week (30 June-6 July), 39,221 new houses were sold in the 30 cities we monitor, down 8.5% wow. Transaction area totalled 4.11m sqm, down 6.9% wow. New inventory in 15 cities decreased 74% wow. Transaction-to-new-launch ratio reached 0.75x, lower than the 2.83x in the week of 23-29 June. Leading developers are trading at 4.14-9.53x 2019F PE and at a 23.7-67.1% discount to NAV last week. Maintain OVERWEIGHT.

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