Analysts recommend blue-chip property stocks with strong state ties, renowned brand names and proven management. Top tips include:
China Resources Land (1109.HK)
Land bank: 21.94 million square meters (according to 2008 interim report)
2008 interim results: Net profit US$106.9 million (up 44.3% year-onyear); Revenue US$358.6 million (up 58.4%)
Analyst take: In a class of its own. China Resources is one of the only property developers with a stable of mature retail and office investment properties, including its crown jewel, the Shenzhen Crossing Phase 1. The power of the brand also spills over into its popular residential assets. Unparalleled support from parent company means the firm can avoid huge cash outflows when acquiring assets.
China Overseas Land and Investment (0688.HK)
Land bank: 24.78 million square meters (according to 2008 interim report)
2008 interim results: Net profit US$298 million (up 68.8% year-on-year); Revenue US$1.4 billion (up 125.2%)
Analyst take: Only getting stronger. The announced US$131.7 billion government spending on low-end housing should hit mid-range property developers such as Agile, Country Garden and China Vanke, thus widening COLI’s lead in the medium term, according to a report by Citi. Total contracted sales for the first 11 months of 2008 grew by 34.3% year-on-year.
Sino-Ocean Land (3377.HK)
Land bank: 10.6 million square meters (according to 2008 interim report)
2008 interim results: Gross profit US$206.3 million (up 180% year-onyear); Revenue US$475.5 million (up 78%)
Analyst take: Punching above its weight. Analysts say the “King of Beijing” boasts one of the highest-quality land banks in China, 80% of which is in the high-growth Bohai Rim region. Contracted sales as of December had skyrocketed to US$1 billion, 130% of its full-year target. With a relatively low net gearing ratio of 40-45% and 45% of estimated 2009 revenues already locked in, Citi sees Sino-Ocean as an antidote to real estate naysayers.