ABCI Updates : Times Property (1233HK, NR) Post Result NDR, Impressive Interim Results, Strong Presales, 2.4x 2016 BB Cons PER
Times Property Holdings Limited, established in 1999 and listed among China's top 50 real-estate developers and the Fortune China 500, is listed on the Hong Kong Stock Exchange (stock code: 01233.HK). Its corporate objective is to develop residential properties, commercial amenities and creative offices while also offering property-management services. As of the end of 2015, total assets exceeded RMB 45 billion.
As of December 31, 2015, Times Property had expanded its businesses to various economically developed cities such as Guangzhou, Foshan, Zhuhai, Zhongshan, Qingyuan and Changsha, thus comprising a total of 36 projects in different development phases and offering high-quality homes to nearly 300,000 owners.
Company Website : http://www.timesgroup.cn
Highlights from ABCI Recent Research Note:
Impressive 1H16 Results:
- 1H16 core profit rose 22.7% YoY to RMB 540mn as revenue increased 41% YoY;gross margin increase 0.6ppt YoY to 26.3% as booked ASP rose 4.4% to RMB 8,227/sqm. Core profit margin declined 1.4 ppt to 9.5% due to surge in tax expenses on increased commercial properties booked.
- 1H16 presales surged 75%YoY to RMB13.4bn (62% of FY target) as GFA and ASP grew 35%YoY and 30%YoY.
- Exposure to 3 major cities in PRD - Guangzhou, Foshan and Zhuhai which have a significant gap between them and Shenzhen in terms of ASP. Landbank of 12.1mn sqm with a low average cost of Rmb 2,753/sqm.
- Net gearing increased from 77% in Dec 2015 to 83% in June 2016, yet average cost of debt declined from 9.64% in FY15 to 8.59% in 1H16
VALUATION: Times is trading on 2.4x bberg consensus FY16 PER with a 5.5% yield. FY15-17 NP CAGR of 30%.