【行业研究报告】碧桂园-Mr. Yeung’s retirement not a surprise

PLEASEREADTHEANALYSTCERTIFICATIONANDIMPORTANTDISCLOSURESONLASTPAGEPLEASEREADTHEANALYSTCERTIFICATIONANDIMPORTANTDISCLOSURESONLASTPAGEACCESSKEYTOOURREPORTSONBLOOMBERG:CMBRChinaPropertySectorJeffreyZeng(852)39163727jeffreyzeng@cmbi.com.hkMiaoZhang(852)37618910zhangmiao@cmbi.com.hkBellaLi(852)37576202bellali@cmbi.com.hkStockDataMktCap(HK$mn)67,436Avg3mthst/o(HK$mn)827.0752wHigh/Low(HK$)6.74/1.00TotalIssuedShares(mn)27,638Source:BloombergShareholdingStructureYangHuiyan52.61%PingAn5.38%Freefloat42.01%Source:HKExSharePerformanceAbsoluteRelative1-mth-25.9%-15.1%3-mth-17.8%-28.1%6-mth-8.7%-7.0%12-mth-60.4%-54.5%Source:Bloomberg12-mthPricePerformance010Mar-22Jun-22Sep-22Dec-22Mar-232007HKHSI(rebased)(HK$)Source:BloombergAuditor:PricewaterhouseCoopersBUY(Maintain)TargetPriceHK$13.36(PreviousTPHK$13.36)Up/downside+457%CurrentPriceHK$2.4011Mar2023WethinkMr.Yeung’sretirementposesnomaterialimpactonCGasthegroundhasbeenlaidbackin2018withMs.Yanbeingtheco-Chairladyandstablemanagement(ThetriangleMr.Mo,Dr.ChengandMs.Wu).Instead,wethinkthechangemaygivecurrentmanagementmoreflexibilityforthestrategy.Fundamental-wise,CGstillrecorded35%YoYsalesdeclinein2M23duetolackofnewlaunchesandunderperforminglowertiercities.However,wethinktheMarchsalesaregoingtobebackatRMB30bnlevel(flattishYoY)onbackofstrongsubscriptionandASPupwardtrend.Thiswouldhelpalleviatethemarketconcernonitsliquidity.AsforCG’slandacquisitionplan,wedonotexpecttohappensosoonduetorecentcrowdedlandmarketandCG’sdebtrepayment.OurTPandfinancialsarecurrentlyunderview.Whatisnew:Beforemarketopenon1Mar,CountryGardenannouncedcompany’sfounderMr.YeungKwokKeungproposedtoresignasChairmanduetoagereason(68yearsold).Co-ChairmanMs.YangHuiyanwillbecomethesoleChairladytogetherwithherChairladyroleinCGS.Atthesametime,executiveDirectorDr.ChengGuangyuhasbeenappointedasamemberofCorporateGovernanceCommittee.Ourread:notasurpriseandnomaterialimpact.-Firstly,thegroundhasbeenlaidfiveyearsago.Mr.YeunghaspromotedMs.Yangasco-ChairmanforfiveyearsinDec2018.ItwasduringoneofthepreviousdarktimeforpropertysectorandCountryGardenitselfinthelowertiercities.Therefore,Ms.YanghastheexperiencetohandlepressurebasedonthepastandtherecentrecoverywouldgivehermoreboosttoleadCG.-Secondly,CGhaslongbeenworkedunderthemanagementofprofessionalmanagerssystem-Mr.Mo(CEO),Dr.Cheng(ED)andMs.Wu(CFO).So,Mr.Yeung’sretirementwouldfurtherhandlemorepowertotheteamwhichcanensurethemoremarket-orientatedflexibility.WeexpectCGsalestopickupinMarchonsolidsubscription:BasedonCRIC’slatestdata,CountryGardenhasrecordedslightMoMincreaseinFebsalesbutstilldown35%YoYin2M23atRMB44bn(attributable).Itispartlyduetolackofnewlaunches.However,ifwelookatthesalessubscription,FebissignificantlystrongerthanJanwhichwillbebookedintoMarsales.Therefore,weexpectMarchsalestobebackatRMB30bnlevel(flattishYoY)andmayseepositiveYoYgrowthinApr/Mayduetolowbase.Basedonourchannelcheck,CG’sprojectsarealsotestingthewatertoincreaseASPof2-5%byloweringthediscount.Thisisalsoagoodsign.EarningsSummary(YE31Dec)FY18AFY19AFY20AFY21AFY22ERevenue(RMBmn)379,079485,908462,856523,064667,448YoYgrowth(%)NA28-51328Netincome(RMBmn)34,61839,55035,02226,79754,352EPS(RMB)1.6121.8501.6181.2182.467YoYgrowth(%)NA15-13-25103ConsensusEPS(RMB)N.A.N.A.NANA0.2P/E(x)1.61.41.62.11.0P/B(x)0.50.40.40.30.3Yield(%)5.46.36.17.6NAROE(%)28.526.020.013.521.9Netgearing(%)49.646.349.345.251.8Source:Companydata,Bloomberg,CMBIGMestimatesCountryGarden(2007HK)Mr.Yeung’sretirementnotasurprise