以下為麥格里所出具有關於台灣資產股、營建股及相關原物料個股的研究報告。
Taiwan property & material
A tough year ahead
The Macquarie economics team has sharply reduced its Taiwan GDP growth forecasts to 2.8% and -2.0% in 2008–09E from 3.6% and 4.0% in anticipation of a severe impact from the financial turmoil and slowing growth in China. Although we expect some longer-term positives to emerge from improving cross-strait
relationship, this is unlikely to be sufficient to offset the anticipated global economic decline. While we believe the decline in construction activity and property prices in Taiwan is likely to be less severe than in other regional cities on a lower base, the downward trend is inevitable.
Financial turmoil to hit both demand and developers
We expect the financial turmoil to deliver a double whammy. On the demand side, we are unlikely to see growth in mortgage lending given the mortgage loan balance in Taiwan is already high at 45% of GDP. On the supply side, we see rising financial risk on tighter liquidity and slowing sales. Taipei developers rely
heavily on bank loans and cash from pre-sales. Net gearing of 83% in 2008E is high compared with 10–55% for the region. Our cashflow analysis shows that 60% of the developers we cover face a high degree of refinancing risk in 2009E.
Expect 10-20% declines in Taipei house prices in 2009
We now expect Taipei house prices to drop 10–20% in 2009E after falling 5% in 2008E. We also expect rental and commercial property prices to decline, especially for industrial-offices as manufacturers cut capex. We now think recovery will take 12–18 months vs our previous expectation of 6–9 months. We thus cut our average NAV (rolled over to 2009E) and target price by 45% and 64%, and reduce our earnings forecasts by 49% and 55% for 2009–10E to reflect more project delays, slower sales and lower housing prices.
Building material stocks to suffer
Around 42% of projects targeted for launch in 2008E have been delayed based on data from developers we cover. Construction permit GFA fell 30% YoY in July-August 2008 after declining 15% in 1H08. This large drop in the private sector is unlikely to be offset by a rise in government infrastructure spending. We
reiterate our negative view on building material companies like Taiwan Cement (台泥 ; 1101)and Tong Ho Steel (東鋼 ; 2006 ).
Stay away from companies with high net gearing
We use three criteria to screen quality names: 1) low financial risk, 2) high earnings visibility, and 3) cheap valuations. Cathay RED(國建 ; 2501), Radium(日勝生 ; 2547)and CEC(大陸工程 ; 2526) stand out with healthy balance sheets and cheap valuations. On the other hand, we suggest staying away from highly net geared developers like Prince Housing(太子建設 ; 2511), Huang Hsiang(皇翔 ; 2545), Farglory Land(遠雄建設 ; 5522), and Rich(力麒 ; 5512). We also reiterate our negative view on building material companies Taiwan Cement(台泥 ; 1101) and Tong Ho Steel(東鋼 ; 2006).
以下是麥格里對於台灣2008年與2009年國內生產毛額(GDP)的預估
A tough year ahead
Expect GDP in Taiwan to decline 2% in 2009E
The Macquarie economics team has sharply reduced its Taiwan GDP growth forecasts to 2.8% and -2.0% in 2008/09E from 3.6% and 4.0% in anticipation of a severe impact from the financial turmoil and slowing growth in China. Although we expect some longer-term positives to emerge from improving cross-strait relationship, increasing infrastructure spending and policies to attract more capital inflows, this is unlikely to be sufficient to offset the anticipated global economic decline. However, we think the downturn in construction activity and property prices in Taiwan is likely to be less than in other regional cities.
對於台灣房地產價格的預估如下：
Expect 10–20% declines in Taipei house prices in 2009
We thus cut our average NAV (rolled over to 2009E) and target price by 45% and 64%, and reduce our earnings forecasts by 49% and 55% for 2009-10E to reflect more project delays, slower sales and lower housing prices. We expect a 10-20% drop in housing prices and 5% reduction in our rental rate assumption for commercial property. Amid the current economic decline and limited upside for mortgage loan growth (mortgage balance/GDP in Taiwan is high), we think it may take 12-18 months for the property downcycle to play out compared with our previous expectation of 6-9 months. Our scenario analysis shows that there could be another 10-20% downside for earnings if developers continue to delay projects in 2009E.
Commercial property more resilient, but not immune
While we believe that commercial property should be more resilient than residential, it is unlikely to avoid the downcycle. We expect to see rental rate reduction in most segments except Grade A office. In the case of industrial office to which many developers plan to shift their focus in coming years, we are worried about price pressure as rental growth has been much slower than capital appreciation in recent years. We don’t expect additional firming in the cap rate as major financial sector buyers are facing severe pressures.
Increasing financial risk for developers
Taipei developers rely heavily on bank loans and cashflow from pre-sales. Their average net gearing of 83% for 2008E is high compared with 10-55% for the region. While some developers successfully extended their bank loans recently, we see increasing financial risk along with tightening liquidity and slow selling paces. Based on our cashflow analysis, 60% of the developers we cover will face higher refinancing risk in 2009E.
There is also default risk if house prices fall more steeply than we expect, such as at 30–40% drop in one year, or the downward price trend extend beyond 2010E.
Building material companies to suffer
Roughly 42% of projects slated for launch in 2008E have been delayed amid weak housing sector sentiment based on the data of developers we cover. According to the Ministry of Interior, construction permit GFA fell 30% YoY in July-Aug 2008 after falling 15% in 1H08, indicating slow construction activity in the next 12-18 months. We believe the steep drop in the private sector is unlikely to be offset by a rise in government infrastructure spending.
Building material companies, like cement and long steel producers, are thus likely to suffer from weaker demand in 2009E. They could face higher default risk in account receivables from small trading companies or private developers.
Avoid high-risk financial names
We use three criteria to screen for quality names: 1) low financial risk, 2) high earnings visibility; and 3) cheap valuations. Cathay RED, Radium and CEC stand out as having less refinancing risk and P/BVs only have 11–20% downside to their trough levels. We suggest investors stay away from developers with high net gearing like Huang Hsiang, Prince Housing, Farglory and Rich. We also reiterate our negative view on uilding material companies like Taiwan Cement (1101 TT, NT$18.6, Underperform, TP: NT$13.5) and Tong
Ho Steel (2006 TT, NT$21.9, Underperform, TP: NT$17.0).
本份研究報告共120頁，內容相當完整，除了產業外也包含了水泥股的台泥、亞泥，鋼鐵股的東鋼、豐興，營建股的國建、日勝生、大陸工程、華固、長虹、皇普、力麒、皇翔、太子、遠雄，資產股的潤泰新、台肥、遠紡、裕隆、東元、南紡等公司。
欲下載本研究報告請按taiwan property and material
10/19 新增亞泥(1102)研究報告，摘要如下：
Asia Cement Corp. (亞泥 ; 1102) - Merrill Lynch
Lower earnings estimate on equity income reduction
PO down to NT$35.3; Neutral maintained
We cut our PO for Asia Cement Corp (ACC) from NT$44 to NT$35.3 and maintain our Neutral rating. Though the company has a good outlook for its China operations and its share price has declined by 45% since early Aug., we find its equity income from U-Ming Marine and investment-related subsidiaries weak. We cut 08E-09E EPS by 19%/15% to NT$8.1bn and NT$8.4bn.
Expect an investment loss in Q3
We cut our Q3 earnings forecast to NT$1bn from NT$2.28bn, mainly reflecting investment loss in investment-related subsidiaries. Though we do not have the details on Asia Cement’s major investment-related subsidiaries, we believe these entities will report disappointing numbers in 3Q08 as we can judge from the sluggish market, which has declined by 24% between end-Q2 and end-Q3.
2009 equity income reduction mainly from U-Ming Marine
We cut Asia Cement’s 09E equity income from NT$9.6bn to NT$8.0bn as the gloomy dry-bulk shipping business will have a negative impact on its major subsidiary, U-Ming Marine (used to contribute one-third of the earnings).
No recovery in domestic demand in 2009
The sluggish property market will offset small incremental demand from government’s potential infrastructure projects, on which we have low expectation given the government’s poor execution and improper resource allocation as seen in the first domestic stimulation project. ACC will try to raise its domestic and export cement prices, which could slightly help improve domestic operations.
China operations will be in line with our forecast in 2009.
欲下載本研究報告請按 asia cement 1102 亞泥
