Equity Research in HK and Mainland China

Li Tang

Thematic (Sector/Industry)

<ul>
<li>Quality developers are said to be supported by NAFMII to issue M&amp;A bonds with a long maturity to acquire real estate projects from troubled developers</li>
<li>This adds further fuel to the rumour that financing for M&amp;A activity will be outside of the three red lines</li>
<li>The Politburo December meeting provided a positive signal for property policy that is expected to be echoed in the Central Economic Work Conference statement this week</li>
</ul>


Quality developers are said to be supported by NAFMII to issue M&amp;A bonds with a long maturity to acquire real estate projects from troubled developers
This adds further fuel to the rumour that financing for M&amp;A activity will be outside of the three red lines
The Politburo December meeting provided a positive signal for property policy that is expected to be echoed in the Central Economic Work Conference statement this week


China State-Owned Developer Plans to Issue M&A Bonds on Interbank Market

<ul>
<li>The National Association of Financial Market Institutional Investors (NAFMII), held a discussion meeting joined by representatives from real estate developers.</li>
<li>The meeting could signal that regulators might ease domestic bond issuance for developers.</li>
<li>We believe that the market has been over-pessimistic on the real estate sector.</li>
</ul>


The National Association of Financial Market Institutional Investors (NAFMII), held a discussion meeting joined by representatives from real estate developers.
The meeting could signal that regulators might ease domestic bond issuance for developers.
We believe that the market has been over-pessimistic on the real estate sector.


Developers Said To Plan Raising Funds Through Interbank Debt Issuance

Some developers have reportedly proposed to extend their offshore bond maturities or conduct debt restructuring at the NDRC and SAFE meeting earlier this week.Eight developers were summoned to the meeting, according to local media reports. The attendees include a mixture of overlevered and stable developers in terms of offshore debt risks, such as <a href="https://www.smartkarma.com/entities/china-vanke-co-ltd" target="_blank" data-smartkarma-citation="entities:26076:1" rel="noopener">China Vanke (000002 CH)</a> , <a href="https://www.smartkarma.com/entities/shimao-property-holdings-limited" target="_blank" data-smartkarma-citation="entities:8375:1" rel="noopener">Shimao Property Holdings (813 HK)</a> , <a href="https://www.smartkarma.com/entities/sino-ocean-land-holdings" target="_blank" data-smartkarma-citation="entities:8898:1" rel="noopener">Sino Ocean Land (3377 HK)</a> , <a href="https://www.smartkarma.com/entities/kaisa-group-holdings-ltd" target="_blank" data-smartkarma-citation="entities:169:1" rel="noopener">Kaisa Group Holdings (1638 HK)</a> ,  <a href="https://www.smartkarma.com/entities/central-china-real-estate-ltd" target="_blank" data-smartkarma-citation="entities:513:1" rel="noopener">Central China Real Estate (832 HK)</a> , and <a href="https://www.smartkarma.com/entities/oceanwide-holdings-co-ltd" target="_blank" data-smartkarma-citation="entities:14048:1" rel="noopener">Oceanwide Holdings (000046 CH)</a>
We have seen a shift in the property policy stance from comprehensive tightening to finetuning policy.

Some developers have reportedly proposed to extend their offshore bond maturities or conduct debt restructuring at the NDRC and SAFE meeting earlier this week.Eight developers were summoned to the meeting, according to local media reports. The attendees include a mixture of overlevered and stable developers in terms of offshore debt risks, such as China Vanke (000002 CH) , Shimao Property Holdings (813 HK) , Sino Ocean Land (3377 HK) , Kaisa Group Holdings (1638 HK) ,  Central China Real Estate (832 HK) , and Oceanwide Holdings (000046 CH)
We have seen a shift in the property policy stance from comprehensive tightening to finetuning policy.

Developers Said to Propose Offshore Bond Extension to Regulators

The NPCSC pushed forward with the property tax by granting the State Council authority to pilot it in certain regions for five years with the purpose to guide reasonable property consumption.
China has discussed the property tax plan and even launched pilot programs in Shanghai and Southwest China's Chongqing as early as 2011. The widening of the property pilot progamme would shake the real estates market,property-related industries, such as the steel and cement sectors. However,the tax may be neutral over the long-term for developers due to the expectation that the existing administrative controlling measures would be gradually removed after the implementation of the tax. Moreover, tax burdens would be moved from the construction stage to home transaction and holding phases, i.e. from developers to homeowners/ speculators.

The NPCSC pushed forward with the property tax by granting the State Council authority to pilot it in certain regions for five years with the purpose to guide reasonable property consumption.
China has discussed the property tax plan and even launched pilot programs in Shanghai and Southwest China's Chongqing as early as 2011. The widening of the property pilot progamme would shake the real estates market,property-related industries, such as the steel and cement sectors. However,the tax may be neutral over the long-term for developers due to the expectation that the existing administrative controlling measures would be gradually removed after the implementation of the tax. Moreover, tax burdens would be moved from the construction stage to home transaction and holding phases, i.e. from developers to homeowners/ speculators.

State Council to Pilot Property Tax in Certain Regions for Five Years

The China Real Estate Association (CREA) reportedly summoned 10 key developers to a discussion meeting last Friday, including <a href="https://www.smartkarma.com/entities/china-vanke-co-ltd" target="_blank" data-smartkarma-citation="entities:26076:1" rel="noopener">China Vanke (000002 CH)</a> , <a href="https://www.smartkarma.com/entities/sunac-china-holdings-ltd" target="_blank" data-smartkarma-citation="entities:240:1" rel="noopener">Sunac China Holdings (1918 HK)</a> , <a href="https://www.smartkarma.com/entities/china-overseas-land-investment-limited" target="_blank" data-smartkarma-citation="entities:419:1" rel="noopener">China Overseas Land &amp; Investment (688 HK)</a> , <a href="https://www.smartkarma.com/entities/gemdale-corp-a" target="_blank" data-smartkarma-citation="entities:14908:1" rel="noopener">Gemdale Corp A (600383 CH)</a> , <a href="https://www.smartkarma.com/entities/longfor-properties" target="_blank" data-smartkarma-citation="entities:8149:1" rel="noopener">Longfor Properties (960 HK)</a><a href="https://www.smartkarma.com/entities/zhongliang-holdings-group-co" target="_blank" data-smartkarma-citation="entities:28009:1" rel="noopener">Zhongliang Holdings (2772 HK)</a> , <a href="https://www.smartkarma.com/entities/seazen-holdings-co-ltd" target="_blank" data-smartkarma-citation="entities:24242:1" rel="noopener">Seazen Holdings Co., Ltd. (601155 CH)</a> , <a href="https://www.smartkarma.com/entities/greentown-china-holdings" target="_blank" data-smartkarma-citation="entities:8954:1" rel="noopener">Greentown China (3900 HK)</a> , and <a href="https://www.smartkarma.com/entities/cifi-holdings-group-co-ltd" target="_blank" data-smartkarma-citation="entities:18387:1" rel="noopener">CIFI Holdings (884 HK)</a> , who were required to send senior executives at vice president or above levels.

The China Real Estate Association (CREA) reportedly summoned 10 key developers to a discussion meeting last Friday, including China Vanke (000002 CH) , Sunac China Holdings (1918 HK) , China Overseas Land &amp; Investment (688 HK) , Gemdale Corp A (600383 CH) , Longfor Properties (960 HK)Zhongliang Holdings (2772 HK) , Seazen Holdings Co., Ltd. (601155 CH) , Greentown China (3900 HK) , and CIFI Holdings (884 HK) , who were required to send senior executives at vice president or above levels.

China Real Estate Association Summoned Key Developers as PBOC Hints Policy Finetuning

China

Longfor Properties Co. Ltd. operates in the property development, property investment and property management businesses in China.

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Longfor Properties (960 HK)

China State-Owned Developer Plans to Issue M&A Bonds on Interbank Market

The new move adds further fuel to the rumour that financing for M&A activity will be outside of the three red lines,This is a crucial development...

Li Tang

Developers Said To Plan Raising Funds Through Interbank Debt Issuance

We believe that the market has been over-pessimistic on the real estate sector. The meeting could signal that regulators might ease domestic bond...

Li Tang

Developers Said to Propose Offshore Bond Extension to Regulators

Some developers have reportedly proposed to extend their offshore bond maturities or conduct debt restructuring at the NDRC and SAFE meeting...

Li Tang

State Council to Pilot Property Tax in Certain Regions for Five Years

The widen of property tax pilot progamme would shake the real estates market,property-related industries, such as the steel and cement sectors.

Li Tang

China Real Estate Association Summoned Key Developers as PBOC Hints Policy Finetuning

We see a short-term opportunity to buy high-quality, low leveraged developers in advance of further calibrated policy support.

Li Tang

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