建发国际（1908 HK）：买入：为下一次飞跃做准备

C&DInternational(1908 HK) Buy:Gearing up for next leap China ◆C&D demonstrated strong sales consistency in May despitea slowerpre-sale seasonwith nomajornew launches MAINTAIN BUY ◆We seegood reason to praiseC&D’scommitment to deliveroperational excellence; double-digit sales growth is on track TARGET PRICE(HKD)PREVIOUS TARGET(HKD)21.2021.20 ◆Maintain Buy with unchanged TP ofHKD21.20, C&D remainsour key pick among regional SOEs Quiet season; exceptional commitment:We praise C&D for its quiet dedication tokeep up withavery consistent sales pace in May despite a slowerpre-sale season.The company logged contracted sales of RMB13.3bn in May, up 23% m-o-m. In 5M24,contracted saleswereup 3% y-o-y. In our view, this isavery consistent and respectablesales performance given therewerenomajorproject launches during the period. Theconsistent sales pace also demonstrates C&D’s ability to monetize its more diversifiedlandbank (relative to other regional peers). As such,we believeC&D is well positioned togain market share as the industry emerges from the downturn,a keyinvestment attributebacking our positive view in the company.C&D is our key pick among regional SOEs. Upcoming catalysts:June sales toaccelerate driven by new launches.Weexpect June sales to pick up,spearheaded by two new project launches in top-tiercities-Lakeside Mansion in Xiamen and Cultural Mansion in Beijing (see details inFigure1).In addition,thelow base in June is favourable for strong y-o-y growth.As C&D’s key project launches are skewed to 2H, we anticipate 2H sales momentumto substantially outpace 1H.Leading regional SOEs, we calculate thatC&D’s June-Decembercontractedsales are set to grow by 19% y-o-yto meet sales targets. Multiple anchors beyond the homebase.May sales demonstrate stability andconsistency. The same could be said aboutC&D’sbusiness model, which reflectsstability through strategic varietyhavinga geographically more diversified landbank(relative to regional peers). C&D has multiple anchors beyond its home base (27%exposure in Fujian), facilitatinglandbankmonetizationvia accumulatedlocal marketexpertise. The four high profile launches in 2H arelocated in four of the most resilientproperty markets with pricing power, namely Hangzhou, Chengdu, Beijing andXiamen. These projects jointly offer saleable resources of RMB27bn, per ourestimate, representing18% of full-year salestargetif fully launched. Stephen Wang*, CFAAnalyst, Asia Real EstateThe Hongkong and Shanghai Banking Corporation Limitedstephen.wang@hsbc.com.hk+852 2284 1675 Michelle Kwok*Head of Asia Real Estate and HK Equity ResearchThe Hongkong and Shanghai Banking Corporation Limitedmichellekwok@hsbc.com.hk+852 2996 6918 Oliver Yu*Analyst, Asia Real EstateThe Hongkong and Shanghai Banking Corporation Limitedoliver.y.o.x.yu@hsbc.com.hk+852 2288 2050 Maintain Buy with anunchangedTP of HKD21.20.Based on anunchanged targetNAV discount of 50%, 0.5 SD above its historical mean, applied toourunchangedNAV estimate of HKD42.40/sh.Fundamentally,we thinkC&D stands out withapromising growth outlook (From a hidden gem to a standout,17 April).We believeC&D’s upcoming project launches in June could accelerate sales momentum and itwill also ride onahousing market recovery inXiamen (Reaping the benefits fromXiamen’s‘goldilocks’conditions, 29 May).Key downside risks include landacquisition slowdown; sharpsales deterioration; steep margin compression; shareplacement at deep discountsandJVproject risks. * Employed by a non-US affiliate of HSBC Securities (USA) Inc, and isnot registered/ qualified pursuant to FINRA regulations HSBC Global Research Podcasts| Listen to our insightsFind out more Issuer of report:The Hongkong and ShanghaiBanking Corporation Limited Disclosures & DisclaimerThis report must be read with thedisclosures and the analyst certifications in the Disclosure appendix, and with the Disclaimer, which forms part of it. View HSBC Global Research at:https://www.research.hsbc.com Financials & valuation: C&D International Valuation and risks We use an NAV toreachour target price. NAV is calculated by adding up the gross assetvalues (GAVs) of the development projects (DPs) and investment projects (IPs), thensubtracting net debt, based on company reports. Our assignment of a target discount is on arelative basis;companies that share similar operational/financial strengths and execution trackrecords should be assigned the same target discount. We derive ourunchangedTP of HKD21.20, based on anunchangedtarget NAV discount of50%, 0.5 SD above its historical mean at 55%, applied to an unchangedNAV/sh of HKD42.40.Our narrow NAV target discount compared tothehistoricalmean reflectsour view that C&D hasanencouragingmargin recovery trend andaunique competitiveedgesupportedby ayounglandbank. Our target price impliesc51% upside and wemaintain our Buy rating.We expect the companytoride onasustainable sales recovery in top-tier cities and strong sales performance of luxuryproje