External broker reports(aggregated public sources), CMB International

CMB International

External broker reports(aggregated public sources)

Incorporated in Hong Kong, supported by the mainland and targeting in global market, CMB International Capital Corporation Limited (“CMBI”) is an integrated financial institution providing comprehensive and professional services. As a wholly-owned subsidiary of China Merchants Bank ("CMB"), by leveraging on the Group’s synergy and coordination in domestic and overseas markets, as well as CMB’s strong resources and outstanding social reputation, CMBI and its subsidiaries have been actively implementing diversified business strategies and set up an overall layout of main business segments including Corporate Finance, Asset Management, Wealth Management, Global Markets and Structured Finance, etc. Adhering to the philosophy of “being clients oriented and increasing our own values by the way of creating value for clients”, CMBI endeavors to provide quality and integrated financial services to institutional, corporate and individual customers both domestic and overseas including Hong Kong IPO sponsorship and underwriting, share placement and rights issue for listed companies, financial advisors, bonds issuance services, asset management, direct investment, wealth management, equity sales and trading, etc.

Thematic (Sector/Industry)

<ul><li>Data from National Bureau of Statistics (NBS) in Nov was in line with market expectation, with property investment decline narrowed to -10.6% YoY in Nov from -11.3% in Oct given new start area surprisingly booked positive increase and NBS adjusted -8% on calculation base in Nov vs. -6% in Oct. </li><li>Property sales was flat with volume/value inched up 2/1% MoM and barely no year-end seasonality like that in the past five years (avg. of 11% MoM in Nov) given low buying sentiment.</li><li>Beijing (BJ) &amp; Shanghai (SH) eased purchasing policies on 14 Dec and the stock market reacted positively with property names on HK market went up an average of 5% on the following day.</li></ul><p><em>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.</em></p>

Data from National Bureau of Statistics (NBS) in Nov was in line with market expectation, with property investment decline narrowed to -10.6% YoY in Nov from -11.3% in Oct given new start area surprisingly booked positive increase and NBS adjusted -8% on calculation base in Nov vs. -6% in Oct. Property sales was flat with volume/value inched up 2/1% MoM and barely no year-end seasonality like that in the past five years (avg. of 11% MoM in Nov) given low buying sentiment.Beijing (BJ) &amp; Shanghai (SH) eased purchasing policies on 14 Dec and the stock market reacted positively with property names on HK market went up an average of 5% on the following day.Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

China Property Sector – Expect New Policy in BJ/SH to Boost Secondary Market in Dec

<ul><li>NBS data in Oct was in line with market expectation, with property investment decline remaining at -11.3% YoY in Oct (vs. -11.3% in Sep) despite a lower base.</li><li>Property sales also weakened with volume/value declining 28/26% MoM and showing larger divergence between high- and low-tier cities.</li><li>We think Nov-Dec 2023 may continue to be weak as the buying sentiment remains low and is hard to be lifted with the marginally weakening effect from easing policies. </li></ul><p><em>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.</em></p>

NBS data in Oct was in line with market expectation, with property investment decline remaining at -11.3% YoY in Oct (vs. -11.3% in Sep) despite a lower base.Property sales also weakened with volume/value declining 28/26% MoM and showing larger divergence between high- and low-tier cities.We think Nov-Dec 2023 may continue to be weak as the buying sentiment remains low and is hard to be lifted with the marginally weakening effect from easing policies. Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

China Property Sector – NBS Oct Data in Line

<ul><li>PJM demand in 4Q22 was weaker than 4Q21 as two major players (took c.35% of mkt share) in total booked 7% YoY decline in newly-contracted GFA (Figure 1).</li><li>Full year performance was diverged that Greentown Mgmt. booked 21% YoY growth in service fee (beat 1%) but CCM plunged 66% YoY on new contract GFA (completed 48% of the target).</li><li>Our main findings are 1) SMDs keep cutting land investment among sluggish property sales and their PJM order contribution dropped sharply (Figure 2). </li></ul><p><em>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.</em></p>

PJM demand in 4Q22 was weaker than 4Q21 as two major players (took c.35% of mkt share) in total booked 7% YoY decline in newly-contracted GFA (Figure 1).Full year performance was diverged that Greentown Mgmt. booked 21% YoY growth in service fee (beat 1%) but CCM plunged 66% YoY on new contract GFA (completed 48% of the target).Our main findings are 1) SMDs keep cutting land investment among sluggish property sales and their PJM order contribution dropped sharply (Figure 2). Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

China Project Management Sector – Prefer defensive Greentown Mgmt. over demotivated CCM

<div><div><div><div><ul><li>Two major players of PJM industry - Greentown Mgmt. and Central China Mgmt. (CCM) both delivered a better-than-expected new contract QoQ growth in 3Q22.</li><li>Solid growth against the sluggish property market was mainly due to pent-up demand from 2Q, incremental demand from local SOEs, LGFVs (see details in next page) and defaulted developers.</li><li>Looking into 4Q and beyond, both companies saw continuously fresh demand from defaulted names (such as Aoyuan and others) as well as LGFV (who took 45% of the land acquisitions) that could drive its long-term growth. </li></ul></div></div></div></div><p><em>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.</em></p>

Two major players of PJM industry - Greentown Mgmt. and Central China Mgmt. (CCM) both delivered a better-than-expected new contract QoQ growth in 3Q22.Solid growth against the sluggish property market was mainly due to pent-up demand from 2Q, incremental demand from local SOEs, LGFVs (see details in next page) and defaulted developers.Looking into 4Q and beyond, both companies saw continuously fresh demand from defaulted names (such as Aoyuan and others) as well as LGFV (who took 45% of the land acquisitions) that could drive its long-term growth. Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

China Project Management Sector – Defaulted developers + LGFV, the new demand

Equity Bottom-Up

GreenTown Management Holdings / Equity Bottom-Up

<ul><li>Greentown Mgmt’s stock price plunged 32% post-1H24 earnings, partly due to the uncertainty on strategy execution among investors following the resignation of former CEO Mr. Li Jun.</li><li>More importantly, the pullback was due to revenue/net profit deceleration (8%/6% YoY vs. guidance of 20%/30%), constrained by declining client payment capacity and heightened competition.</li><li>A 19% YoY drop in new contract value reflects 1) reduced land supply, 2) slow sales recovery which dampened clients’ confidence in development, and 3) insufficient funds to start projects. </li></ul><p><em>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.</em></p>

Greentown Mgmt’s stock price plunged 32% post-1H24 earnings, partly due to the uncertainty on strategy execution among investors following the resignation of former CEO Mr. Li Jun.More importantly, the pullback was due to revenue/net profit deceleration (8%/6% YoY vs. guidance of 20%/30%), constrained by declining client payment capacity and heightened competition.A 19% YoY drop in new contract value reflects 1) reduced land supply, 2) slow sales recovery which dampened clients’ confidence in development, and 3) insufficient funds to start projects. Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Greentown Management (9979 HK) - Weakening Demand + Intensifying Competition, What Is Next?

China

GTMH is a project management company in China with presence in 84 cities across 25 provinces, municipalities, and autonomous regions. It was the largest project management company in China in terms of accumulated contracted GFA between 2016 to 2018.


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GreenTown Management Holdings (9979 HK)

China Property Sector – Expect New Policy in BJ/SH to Boost Secondary Market in Dec

Data from National Bureau of Statistics (NBS) in Nov was in line with market expectation, with property investment decline narrowed to -10.6% YoY...

CMB International

China Property Sector – NBS Oct Data in Line

NBS data in Oct was in line with market expectation, with property investment decline remaining at -11.3% YoY in Oct (vs. -11.3% in Sep) despite a...

CMB International

China Project Management Sector – Prefer defensive Greentown Mgmt. over demotivated CCM

PJM demand in 4Q22 was weaker than 4Q21 as two major players (took c.35% of mkt share) in total booked 7% YoY decline in newly-contracted GFA...

CMB International

China Project Management Sector – Defaulted developers + LGFV, the new demand

Two major players of PJM industry - Greentown Mgmt. and Central China Mgmt. (CCM) both delivered a better-than-expected new contract QoQ growth in...

CMB International

Greentown Management (9979 HK) - Weakening Demand + Intensifying Competition, What Is Next?

Greentown Mgmt’s stock price plunged 32% post-1H24 earnings, partly due to the uncertainty on strategy execution among investors following the...

CMB International

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