Company ReportNeutral (Prior: Outperform) TP：HK$ 19.50 Current price：HK$17.92 CHINA OVERSEAS(00688.HK) As an impact of the government’s tighten property market issues, China’s house transaction volume was slipped down in the recent month. While, the house price is still stabilize caused by the shorter new home supply. In February 2010, China Overseas Land & Investment limited (COLI) achieved a house sales result of 185 thousand Sq.m, representing a YoY decline of roughly 14%. Its total house sales volume in the first two month this year was about 510 thousand Sq.m, below the single month property sales of 625 thousand Sq.m in March 2009. We expect COLI’s house sales volume to down 20% in 1Q this year, reach 800 thousand Sq.m. Fast land expansion continued China Merchants Securities (HK) Stanley Wu +86-755-83295441 Wuxuan@cmschina.com.cn 07 Apr 2010 Key data 2009 earning result higher than our expectation COLI achieved a total house contract sales revenue and volume of HK$47.8 billion and 4.8 million Sq.m last year. Meanwhile, its reported turnover and net profit were reached HK$37.3 billion and HK$7.5 billion respectively, representing a YoY growth of 97.5% and 48%. The squeezed profit growth was caused by the rising land cost and property development related tax rate. COLI posted a 2009 EPS of HK$0.92, 7% higher than our previous forecast of HK$0.86. HSI Index 21537.00HSCEI Index 12696.05S/O（mn） 81698169S/O (HK)（mn） Mkt cap (HK) (mn) 146389BVPS（HKD） 5.15Holding (％)Major share holder China State Fast land expansion continued COLI added an attributable gross floor area (GFA) of 1.1 million Sq.m into its land bank in 2009. The total land price was approximately HK$23.6 billion, implying an average per GFA land cost of HK$2,165/Sq.m. Given a strong ending 2009 financial background of nearly HK$27 billion available used financial resources, we believe COLI’s land bank expansion pace will remain fast thought 2010. In the fist two month 2010, COLI has expanded it land bank by another 2.3 million Sq.m, and its whole year land bank acquisition target is set at 6 million Sq.m, Construction Engineering corporation 53.09Free float 46.51Industry Share performance %1m 6m12mAbsolute return 4 -1113Relative return 0 -12-27 2010 earning growth may slow down We believe COLI’s profit growth will low to 15.5% in 2010 (2009:48% ) because of the rising land cost, property tax and slowed down house sales. We rate COLI as a “neutral”, with a 12 month based target price of HK$ 19.50. The stock target price is represented 5% to our estimated forward 2010 NAV/Share of HK$20.50. Financials (HKD mln) 2007 -200204060Apr-09Jul-09Nov-09Mar-10(%)00688.HKHSI Index Source：Bloomberg Please see important notice on the last page. 1 of 52008 20092010E2011ERevenue 16,633 18,892 37,322 43,122 53,274 Growth(%) 52.4% Related research 13.6% 97.5%15.5%23.5%Net income 4,180 5,049 7,469 8,806 10,645 Growth(%) 76.3% 20.8% 47.9%17.9%20.9%EPS(RMB) 0.56 0.64 0.92 1.08 1.30 DPS(RMB) 0.12 0.13 0.20 0.25 0.28 P/E(X) 32.3 28.3 19.8 16.8 13.9 P/B(X) 5.2 4.3 3.5 3.4 3.3 ROE(%) 15.9% 15.2% 17.7%20.3%23.8%Source: Company data, CMS (HK) estimate 公司报告中性 中国海外发展(00688.HK) (上次：优于大市) 房屋销售增速略有下滑，购地热情有增无减 目标价：HK$ 19.50 随着国家多项房市调控政策的出台与落实，国内房价近期似乎暂缓了上升步伐，部分城市的房屋成交量亦同比出现回落。根据中国海外发展有限公司（下称公司或中国海外）最新的销售数据显示，其2010年2月份共销售物业18.5万平方米，较去年同期下降近14%，公司今年1-2月份累计的销售物业面积则约计51万平方米，与09年同期相比增长36.4%。考虑到去年3月份公司房屋销售面积的基数较高，达62.5万平方米，因此我们预计即便我国房市的成交量近期已有所回升，公司今年1季度的整体物业销售面积亦可能较去年同期下降两成至80万平米左右。鉴于公司的物业销售均价自去年1季度以来上涨了约20%，今年1季度销售的高端住宅产品的比例又高于去年同期，故我们估计公司今年1季度的物业销售额或有望超过去年同期水平至95元（港币，下同）左右，今年1-2月份公司已实现物业销售额68.8亿元。 现价：HK$17.92 招商证券(香港)研究部 吴轩 +86-755-83295441 Wuxuan@cmschina.com.cn 2010年4月7日 基础数据 恒生指数 21537.00亿 12696.05H股指数 2009年业绩略好于预期 中国海外2009年共销售物业477万平方米，实现合约销售收入478亿元。期内公司确认营业收入373亿元，较去年同期增长97.5%。受土地成本及房地产开发相关税率上升的影响，公司09年度的毛利率较08年度下降26.9个百分点至31.6%，但公司利息费用及行政、分销支出的稳步下降亦减缓了其整体盈利水平的下滑。去年全年，公司实现净74.7亿元，相比08年提高48%，并高于我们此前预测的69.8亿元约7%。 利 土地储备大幅扩充 受益于房屋销售的强劲增长以及融资门槛的显著放宽，公司的资金状况在09年度大幅改善，并导致其加大了土地购置投入。09年度，公司共新增权益土地储备（楼面面积）近1,100万平方米，涉及土地费用支出236.4亿元，折合土地成本约2,165元/平方米。截止09年年底，公司账面持有现金约239亿元，