sino-ocean land (3377 hk) - pg.jrj.com.cn

FIG Real Estate Equity – China

Company report

abcGlobal Research

Stabilized shareholding structure clearing share price overhang: Sino-Ocean has

managed the exit of its original SOE parents and found two strategic investors who have

demonstrated that they are in for the long haul. Furthermore, both possess the capability

and the desire to cooperate with the company at both the project and corporate levels, and

look for opportunities for synergy.

Advantage in funding access, growing platform for investment properties: Sino-Ocean

enjoys a cost of funding advantage due to its legacy SOE status. China Life’s long-dated

funding represents a strong competitive advantage. This is enhanced by the recent changes

to CIRC rulings. Sino-Ocean is also developing a portfolio of high grade investment

properties through a strategic relationship with Swire Properties.

Engaging the expanded operational platform, organic deleveraging expected: Sino-

Ocean has transitioned to a larger operational platform, generating contract sales from

projects in 17 cities during 1H12. This compares favourably to projects in nine cities in

2010 and in five cities in the years before that. We estimate contract sales growth of 20%

or more in 2013 and beyond, providing relief to the balance sheet and allowing it to start to

deleverage organically. Initiate with OW(V): Our target price of HKD5.4 is based on a long-term 39% discount

(historical mean) to our 12M-forward NAV estimate of HKD8.8. We see two catalysts for

a rerating: recognition of the fact that the shareholding structure is no longer a liability,

but rather a competitive advantage in funding access and strategic partnerships; and, faster

than expected growth in contract sales, which should reaffirm and validate the success of

the nationwide expansion. Our earnings estimates are higher than consensus by 5% for

2012, 8% for 2013 and 11% for 2014. Downside risks: 1) continued operational

weakness leading to liquidity issues; and 2) issuance of hybrid securities or share

placement leading to dilution.

Overweight (V) Target price (HKD) 5.40 Share price (HKD) 4.40 Forecast dividend yield (%) 3.6 Potential return (%) 26.3 Note: Potential return equals the percentage difference between the current share price and the target price, plus forecast dividend yield

Dec 2011a 2012e 2013 e

HSBC EPS 0.28 0.30 0.37 HSBC PE 12.6 11.8 9.7

Performance 1M 3M 12M

Absolute (%) 17.0 0.5 66.7 Relative^ (%) 10.7 -2.4 48.6

Note: (V) = volatile (please see disclosure appendix)

9 October 2012

Phillip Zhong* Analyst The Hongkong and Shanghai Banking Corporation Limited +852 2996 6535 [email protected]

Derek Kwong* Regional Head of Real Estate Research The Hongkong and Shanghai Banking Corporation Limited +852 2996 6629 [email protected]

Ganesh Siva* Associate Bangalore View HSBC Global Research at: http://www.research.hsbc.com

*Employed by a non-US affiliate of HSBC Securities (USA) Inc, and is not registered/qualified pursuant to FINRA regulations

Issuer of report: The Hongkong and Shanghai Banking Corporation Limited

Disclaimer & Disclosures This report must be read with the disclosures and the analyst certifications in the Disclosure appendix, and with the Disclaimer, which forms part of it

Sino-Ocean Land (3377 HK)

Initiate OW(V): Getting back on course

Stabilized shareholding structure clears overhang; support from strategic investors at corporate and project levels with opportunities for synergy

SOE funding advantage; financing from China Life, enabled by recent CIRC rulings; growing platform of investment properties through partnership with Swire

Initiate with OW(V) and TP of HKD5.4, representing average historical discount to 12M forward NAV of HKD8.8; structural and operational hurdle cleared, rerating on the horizon

Enterprise value (CNYm) 48,590Free float (%) 84Market cap (USDm) 3,278Market cap (HKDm) 25,413

Source: HSBC

Index^ HSCEIIndex level 9,965RIC 3377.HKBloomberg 3377 HK

Source: HSBC

http://www.research.hsbc.com/

http://www.research.hsbc.com/

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Sino-Ocean Land (3377 HK) Real Estate 9 October 2012

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Financial statements

Year to 12/2011a 12/2012e 12/2013e 12/2014e

Profit & loss summary (RMBm) Property sales revenue 17,618 21,559 25,648 33,827 Property inv & other rev 2,279 3,267 4,275 4,782 Cost of sales (13,639) (17,270) (20,834) (27,155)Gross profit 6,258 7,556 9,089 11,453 Selling & Admin expenses (1,596) (1,871) (2,160) (2,598)Other gains & misc 353 101 90 99 Operating profit/EBIT 5,015 5,786 7,020 8,954 Net interest (419) (453) (475) (502)Share of profit from associates 66 10 16 88 Non-operating profit/loss 513 0 0 0 PBT 5,174 5,343 6,561 8,540 Taxation (2,554) (2,448) (3,186) (4,391)Minority interests (50) (399) (495) (689)Net profit 2,571 2,496 2,880 3,460 Core Profit 2,186 2,496 2,880 3,460 Adj core profit 1,595 1,758 2,142 2,723

Cash flow summary (RMBm) Cash flow from operations (9,377) 1,660 3,726 6,350 Capex (74) (3,129) (3,463) (1,023)Change in investments 172 0 0 0 New shares issued 2,147 (737) (737) (737)Dividends paid (592) (717) (821) (1,016)Others 2,490 2,000 2,000 2,000 Net change in cash (5,235) (922) 705 5,573 Cash at the beginning 13,977 8,648 7,725 8,430 Cash at the end 8,648 7,725 8,430 14,003

Balance sheet summary (RMBm) Shareholders' funds 35,268 36,310 37,631 39,337 Long-term liabilities 19,106 23,132 26,311 27,711 Minority interests 3,489 3,888 4,383 5,073 Deferred items 1,387 1,387 1,387 1,387 Total capital employed 59,250 64,716 69,713 73,508 Fixed assets 5,688 8,816 12,279 13,302 Other assets 4,644 4,644 4,644 4,644 Current assets 99,954 105,795 113,662 123,369 Total assets 110,285 119,255 130,586 141,315 Ratio, growth and per share analysis

Year to 12/2011a 12/2012e 12/2013e 12/2014e

y-o-y % change Revenue 45% 25% 21% 29%Operating profit 37% 15% 21% 28%PBT 34% 3% 23% 30%Reported EPS -11% -13% 22% 27%HSBC EPS -12% 7% 22% 27%

Ratios (%) ROIC ex-exceptional 4% 4% 4% 5%ROAE ex-exceptional 7% 7% 8% 9%ROAA ex-exceptional 2% 2% 2% 3%Operating margin 25% 23% 23% 23%Core profit margin 11% 10% 10% 9%Interest cover ex-exceptional (x) 2.5 2.4 2.8 3.4 Net debt/equity (in-restricted cash) 60% 65% 65% 52%

Per share data (RMB) Reported EPS (fully diluted) 0.35 0.30 0.37 0.47HSBC EPS (fully diluted) 0.28 0.30 0.37 0.47DPS (HKD) 0.15 0.16 0.19 0.24BV 6.27 6.29 6.52 6.82

NAV breakdown

(RMBm) (HKD/sh) % of GAV

Development properties

Residential 67,348 13.7 79.1% Office/retail 6,963 1.4 8.2%Investment properties Office/retail 10,029 2.0 11.8% Hotel properties 796 0.2 0.9%Net debt (excluding restricted cash) (24,940) (5.1)Preferred and capital securities (8,502) (1.7)Outstanding LAT (3,393) (0.7)Outstanding land premium (5,000) (1.0)12M fwd. NAV 43,302 8.8 100.0%

Source: HSBC estimates NAV discount chart

-100%-80%-60%-40%-20%

0%20%40%

Sep-07 Nov -08 Jan-10 Mar-11 May -12

% to NAV +1 SDMean -1 SD

Source: HSBC estimates Price relative

02468

10121416

Sep-07 May -08 Jan-09 Sep-09 May -10 Jan-11 Sep-11 May -12

0246810121416

Sino Ocean Land Rel to HSCEI

Source: Thomson Reuters Datastream, HSBC estimates

Note: Price at close of 08 October 2012

Financials & Valuation: Sino-Ocean Land Overweight (V)

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Introduction We are initiating coverage on Sino-Ocean with an

Overweight (V) rating and a target price of HKD5.4,

based on a 39% discount to our 12-month-forward

NAV estimate of HKD8.8. This implies a potential

return of 26.3% from the current level, including a

dividend yield of 3.6%. (Potential return equals the

percentage difference between the current share

price and the target price, including the forecast

dividend yield when indicated.)

Sino-Ocean is a well-regarded regional developer

that recently expanded across China. The

company has cleared a structural hurdle under a

stabilized shareholding structure, removing the

share price overhang. It continues to enjoy a

funding cost advantage due to its quasi-state-

owned enterprise (SOE) background, as well as

financial and operational support from its strategic

investors. In particular, long-dated funding from

China Life should prove to be a strong

competitive advantage, especially in light of the

recent accommodative changes to China

Insurance Regulatory Commission (CIRC)

regulations. While the balance sheet is still

constrained, the company has shown early signs

of fully engaging its enlarged operating platform.

We expect the operational step up to provide

relief to the balance sheet.

Key positives We believe the major investment positives are: a

stabilized shareholding structure which clears a

major overhang; support of strategic investors at

corporate and project levels; legacy SOE status

translating into superior access to funding; and

Sino-Ocean’s emerging national platform.

Stabilised shareholding structure clears a major overhang

Over the past two years, the company has

managed the exit of COSCO and Sinochem,

which sold their stakes in Sino-Ocean. Two

strategic investors have taken their place, with

China Life building a stake of 24.1%, and Nan

Fung Development (NFD) taking a 17.7% share

in the company.

Both strategic investors have demonstrated a

long-term commitment to the company through

their involvement with Sino-Ocean over the years.

Investment summary

Stabilized shareholding structure removes price overhang;

support from strategic investors at corporate and project levels

SOE funding advantage persists; strategic relationship with China

Life opens door to long-dated funding under new CRIC rulings

Deleveraging expected, starting in 2014 as national operating

platform fully engages; initiate OW(V) with TP of HKD5.4 based on

historical mean discount to 12M-forward NAV estimate of HKD8.8

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China Life was one of the cornerstone investors

during the company’s IPO in 2007, while NFD

subscribed to 50% of the company’s convertible

bond issue in 2010 before acquiring an equity

stake in the company.

In our view, the company’s shareholding structure

is now stabilized, with the presence of long-term

strategic investors. This removes the price

overhang caused by COSCO and Sinochem’s

divestment of their stakes.

Furthermore, the company’s current shareholding

structure is unique among mainland developers. It

provides a foundation for superior corporate

governance and better protection of minority

interest due to the absence of a controlling

shareholder and the presence of a balanced board.

Strategic investors’ support at corporate and project levels

China Life and NFD have shown the desire and

the capability of co-operating with Sino-Ocean at

both the project and corporate levels.

On the project level, China Life and NFD provided

equity investments on three large projects. China

Life has also commissioned the company in the

construction of three corporate facilities.

On the corporate level, China Life can be a source

of long-dated financing to the company, reducing

both funding cost and interest rate risk. Given the

recent loosening of CIRC policies governing

insurance companies’ investment in real estate, it

should become apparent that the strategic

relationship with China Life represents an

important competitive advantage for Sino-Ocean.

We foresee this funding facilitating the

company’s undertaking of high capex commercial

projects. It will also provide a channel for the

company to monetize its growing investment

property portfolio either through taking out

operating loans or en-bloc sales.

Legacy SOE status translates into superior access to funding

Due to its legacy SOE status, Sino-Ocean has

superior access to funding relative to other private

sector developers. The company’s issuance of

perpetual subordinated securities in early 2011

compared favourably to other developers’ high

yield bonds. It is important to note that such

instruments are usually available to utility

operators bearing little market risks.

The company also has good access to the off-

shore syndicated loan market, as evidenced by an

USD600m term loan facility acquired in June

2012. This funding channel is only available to a

privileged few in the sector, mostly SOEs and the

strongest private sector developers.

Emerging national platform

The company embarked on nationwide expansion

in 2010, increasing its footprint from seven cities

to 16 cities in that year, and to 18 cities in 2011.

The company recorded contract sales from 16 and

17 cities in 2011 and 1H12. We view this as an

early indicator of the company’s emerging

national platform.

We expect contract sales to grow 15% in 2012 to

reach the full-year target of RMB27bn. For 2013

and 2014, we forecast contract sales growth to

accelerate to 23% and 21%, respectively.

Despite stepping up the operating platform, the

company has managed to maintain its asset turn and

cash collection rate. Projects in home cities continue

to sell well, retaining top project sales rankings.

Key concerns We believe the major investment concerns are:

concentration risk, margin squeeze, and balance

sheet stress.

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Concentration risk

The company is still exposed to significant

geographic and project concentration risks. The

Pan Bohai Rim and Northeast Region contributed

over 77% of contract sales for 2011 and 1H12.

Year-to-date contract sales are heavily dependent

on high-profile project launches.

While the concentration risks remain, we believe

the company will gradually mitigate such risks as

it continues to solidify its expansion and diversify

its contract sales across a broader portfolio of

cities and projects.

Margin squeeze

The company’s land bank expansion took place in

2010, with acquisition of 7.4m sqm in a single

year. The average land cost of those acquisitions

is 10% higher than the aggregate average cost.

Assuming a two-year delay between acquisition

and contracted sales, the higher land cost will

begin to filter through in 2012 and 2013 while the

physical market will show a slightly downward

trending or flat ASP.

While margin squeeze is part of a sector wide

secular trend, we expect the company to focus on

faster asset turn through quicker project launches

and a larger operating platform. The development

of investment properties should also blunt the

impact of the margin squeeze.

Balance sheet under stress

Our model shows the company’s net gearing

rising to the high 70% level in 2012 and 2013,

before declining in 2014. The high gearing ratio is

indicative of share placement risk.

While share placement risk exists for many

developers, factors such as availability of debt

financing and projected strong growth in contract

sales, should mitigate such risk for the company.

Organic deleveraging is feasible under stepped up

contract sales.

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Stabilized shareholding structure removes overhang After the SASAC announced the SOE real estate

business divestment policy in March 2010, the

company’s uncertain shareholding structure was a

source of anxiety for investors. Two years later,

the company managed the exit of COSCO and

Sinochem, and emerged with two major strategic

investors, China Life and NFD. In addition,

Wharf acquired a 5.07% stake in the company in

May 2011, and subsequently increased its stake to

6.02% in June 2012.

Strategic investors in for the long haul

China Life participated in the company’s 2007

IPO as one of the cornerstone investors (through

its HKD230m commitment). In December 2009,

China Life invested HKD5.8bn in a 16.6% stake

of the company through subscription. A few

weeks later, it acquired most of the shares held by

Sinochem, boosting its stake to 24.1%. All shares

were acquired at a price of HKD6.23.

Given China Life’s long-term involvement with

the company as well as the high entry price, we

believe it will continue its role as the largest

strategic investor and remain committed to the

company in the near to medium term.

NFD’s involvement with the company began in

July 2010, when it subscribed to 50% of the

company’s perpetual CB issuance at a conversion

price of HKD6.85. In December 2010, NFD

obtained 11.8% of the company by acquiring 70%

of the shares offered for sale by COSCO.

NFD is run by an experienced management team

headed by Vivien Chen. She had been with Nan

Fung for over 30 years, and succeeded her father

Dr Chen Din Hwa as Chairman in January 2009.

Hence, she was directly involved in the decision-

making process leading to the investment in Sino-

Ocean. We believe the recent death of NFD’s

founder, Dr Chen, will have no impact on NFD’s

strategic relationship with the company.

As further evidence of both strategic investors’

long-term commitment to the company, China

Life and NFD also subscribed to the perpetual

subordinated security issuance in May 2011,

essentially providing additional long-term capital

to the company.

Investment positives

Stabilized shareholding structure removes price overhang; full

support from strategic investors at project and company level

Leading market shares in home cities, strong cash collection ratio,

and rapidly growing platform of investment properties

Legacy SOE status allows for superior access to funding; China

Life provides a competitive edge under new CIRC rulings

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Given each party’s financial stability as well the

entry price, we believe that neither party is likely

to unwind its investment in the company in the

near term for financial reasons.

Project level support from major shareholders

Beyond fulfilling the role of a strategic investor,

China Life and NFD have demonstrated their desire

and ability to provide support on the project level.

China Life, through its associate companies,

invested in the company’s Plot Z13 project in

Beijing’s central business district (CBD) in

Chaoyang District. China Life contributed 70% of

the initial equity investment of RMB600m, and

subsequently acquired an additional 20% project

stake from Sino-Ocean.

Company management indicated that China Life

has shown willingness to participate at project

level through both equity investments and

shareholder loans. This is facilitated by the recent

changes in CIRC rulings which we will discuss

further in the sections below.

Similarly, NFD has demonstrated a keen interest

to participate on the project level. Currently, NFD

has established JVs with Sino-Ocean to develop

two projects: CBD Plot Z6 in Beijing’s Chaoyang

District and Ocean Diamond Bay in Dalian. NFD

has taken up stakes of 20% and 10%, respectively.

Joint ventures with China Life and NFD

Project City Partner Stake

Ocean Diamond Bay Dalian NFD 10% CBD Plot Z13 Beijing China Life 90% CBD Plot Z6 Beijing NFD 20%

Source: Company data

Company management indicated that NFD’s

participation is mainly motivated by its desire to

leverage Sino-Ocean’s connections to local

governments. Hence NFD will usually take on the

role of a minority stake holder at the project level.

Enlarged footprint, continued strength in home cities After mostly operating as a regional developer in

the Bohai Rim and Northeast Region, the

company embarked on an expansion initiative in

2010. During that year, the company grew its

footprint from seven cities to 16 cities. In 2011,

the company entered two more cities.

In merely two years, the company had expanded

into two hotly contested tier-one cities, Shanghai

and Shenzhen. It also entered Hainan, a vacation

and leisure market driven by non-core demand, in

which the company had no prior experience. The

company also entered into the Western Region

where it had no previous presence.

In 2011, the company recorded sales from

projects located in 16 cities, compared to sales

from nine cities in 2010 and only five before that.

In 1H12, the company continued the trend,

recording contract sales from 17 cities. We view

this as an early indicator of the success of the

company’s expansion programme.

Geographic expansion over time

2008 2009 2010 2011

Beijing Beijing Beijing Beijing Tianjing Tianjing Tianjing Tianjing Shenyang Shenyang Shenyang Shenyang Dalian Dalian Dalian Dalian Hangzhou Hangzhou Hangzhou Hangzhou Zhongshan Zhongshan Zhongshan Zhongshan Huangshan Huangshan Huangshan Changchun Changchun Qinhuangdao Qinhuangdao Qingdao Qingdao Shanghai* Shanghai Wuhan** Wuhan Chongqing** Chongqing Chengdu** Chengdu Haikou** Haikou Sanya** Sanya Shenzhen* Zhenjiang

*New tier one cities, **New geographic region or market segment Source: Company data

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Our discussions with management indicate that

the company has now completed its geographic

expansion, and the operational focus will shift to

deepening its penetration of newly entered cities.

The company’s projects remain well regarded in

its traditional home cities such as Beijing, Dalian,

Shenyang and Zhongshan, as reflected in market

share and project sales rankings.

1H12 market share and project sales ranking

City Mkt share ranking Project

Project sales ranking

Beijing 4 Ocean La Vie 3 Ocean Diamond Bay 1 Ocean Worldview 3 Ocean Times 4

Dalian 1

Ocean Plaza 5 Fushun 2 Ocean City 1 Zhongshan 2 Ocean City 1


Asset turnover is a common measure of

operational efficiency. We define asset turnover

as GFA sold as a percentage of average land size.

We believe this is a more pure measure, free of

distortions driven by asset prices. Despite the

jump in land bank size, the company maintained

its historical asset turnover ratio. As investors

often hold the view that the company has weak

execution ability, we believe the operational

capability demonstrated here shows a respectable

performance among its peers. Another indicator of operational strength is the

company’s cash collection ratio, which stands out

in the sector, both due to the high percentage, as

well as its consistency over the years. The

company has maintained a cash collection ratio

greater than 93% since 2008, the only developer

to do so in the sector.

Recent cash collection rate

Company 2011 1H12

Agile 69% 83% COLI 53% 65% Country Garden 95% 88% CR Land 107% 91% Evergrande 80% 85% GZ R&F 76% 91% KWG 69% 66% Longfor 88% 93% Shimao 72% 76% Sino Ocean 95% 93% Yanlord 95% 85%

Source: Company data, HSBC estimates

Platform for investment properties Currently, the company’s investment property

portfolio consists of five projects totalling GFA

320,000sqm, contributing only 2% of total revenue

in 2011. We estimate this to grow nearly 1m sqm

by 2013, contributing 7% of total revenue.

The growth is attributed to two JVs with Swire

Properties, Indigo in Beijing and Dacisi in

Chengdu. Both are mixed-use projects to be

anchored by premium retail, grade-A offices and

Swire hotels. Through cooperation with an

established Hong Kong developer, we expect the

company to strengthen its capability for

developing similar high-grade investment

properties in years to come.

Under CIRC’s 2012 circular published in July,

insurance companies are permitted to invest up to

20% of their total assets in real estate. In addition,

when investing in real-estate related financial

products, insurance companies, along with their

affiliates, are permitted to invest up to 60% of the

total issuance. Furthermore, if an insurance

company already holds an equity position in a

project company, it can extend shareholder loans

Turnover measured by GFA sold and land bank

Company 2008 2009 2010 2011 2012 1H

Agile 6% 9% 9% 10% 9% COLI 11% 17% 16% 16% 22% Country Gdn 0% 11% 14% 13% 11% CR Land 3% 10% 9% 11% 13% Evergrande 0% 12% 10% 10% 9% GZ R&F 6% 10% 11% 9% 8% KWG 0% 0% 13% 11% 9% Longfor 0% 8% 9% 11% 10% Shimao 5% 9% 8% 6% 9% Sino Ocean 6% 11% 10% 11% 9% Yanlord 0% 17% 8% 5% 5%


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equal to 40% of the total investment of the

project. These changes should increase insurance

companies’ appetite for income producing

commercial properties in prime locations to match

their long-dated liabilities.

We believe a strategic relationship with China

Life offers an important funding channel.

Compared to developers’ usual short-term sources

of funding, investments from an insurance

company can significantly reduce interest-rate risk

and provide a financial cushion in a volatile

financial environment. Monetization can be in the

form of operating loans or en-bloc sales.

The company also acquired 70% of Gemini

Investments, a Hong Kong listed company.

Gemini is the GP of a real estate fund seeded with

capital from Sino-Ocean and KKR. The company

intends to use Gemini as an off-shore vehicle to

leverage property funds and offshore developers

for project-level investments.

Superior access to funding The company accessed the capital market on two

occasions in recent years, issuing a perpetual

subordinated CB (PCS) in July 2010 and a

perpetual subordinated bond (PSS) in May 2011.

More recently, the company obtained a syndicated

loan in June 2012.

During 1H11, the market was very receptive to

Chinese developers issuing high yield bonds.

Many listed developers issued USD bonds with

rates near or above 10%. Only CRL and

Franshion, both SOEs, were able to obtain

funding with yields below 10%. The company’s

coupon rate of 10.25% on its PSS compares

favourably to other developers’ high yield

issuances with terms of only three to seven years.

While the PSS was structured with a rate step up

in five years, the company also has an interest

deferral option as well as a call option.

It is important to note that the company’s choice

of issuing perpetual was unusual for a mainland

developer. The instrument was largely reserved

for utility operators with high credit quality off-

takers, sparing the bondholders from all market

risks. The issuance of the perpetual bond was a

first for a mainland developer, indicative of the

uniquely strong credit profile of the company.

To determine the marginal cost of debt, we also

examined the current bond yield of developers’

issuances of comparable vintage. We believe the

PSS’ current yield still compares favourably.

Developer bond issuance during 1Q-2Q11

Issuance date

Company Type Term Coupon Current yield

Feb-11 Country Garden Sr Notes 7 11.13% 11.00% Mar-11 Shimao Sr Note 7 11.00% 11.23% Mar-11 Powerlong Sr Note 3 11.50% 19.60% Mar-11 Yanlord Sr Note 7 10.63% 11.89% Mar-11 KWG Sr Note 5 12.75% 12.18% Apr-11 Longfor Sr Note 5 9.50% 8.11% Apr-11 Franshion Sr Note 10 6.75% 7.70% May-11 Sino Ocean Perp Perp 10.25% 12.98% May-11 CRL Sr Note 5 4.63% 3.62% May-11 Kaisa Sr Note 4 13.50% 12.39% Jul-11 CRL Sr Note 5 4.63% 3.62%

Source: Bloomberg data

In June 2012, the company obtained a three-year

multi-currency syndicated loan at an all-in rate of

532bps (LIBOR/HIBOR plus 400bps). This puts

the company among a group of privileged

developers with access to the offshore syndicated

loan market.

Off-shore syndicated loans in 1Q-2Q12

Issuance date

Company Amount Term

Apr-12 COLI HKD7.6bn 3-year loan at HIBOR+400bps Apr-12 Longfor HKD 2.43bn 3-year dual currency loan at

LIBOR/HIBOR+400bps Jun-12 SOHO USD626m 3-year loan at LIBOR/HIBOR +

425bps Jun-12 Sino-

Ocean USD600m 3-year multi-currency loan at

LIBOR/HIBOR plus 400bps


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As we mentioned before, both major shareholders,

China Life and NFD, have supported the company

on the corporate level by subscribing to significant

portions of the company’s equity and debt

placements in the past, enhancing the attractiveness

of its offerings to the capital market.

In our view, given the company’s legacy status

with COSCO and its current relationship with

China Life, the company enjoys a quasi-SOE

status, placing it close to SOEs and above most

private sector developers in terms of

creditworthiness.

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Geographic and project concentration risk remain In the year to August, the company achieved

contract sales of RMB20.2bn, accounting for 75%

of its full-year target of RMB27bn. While the run

rate is 5pts ahead of the sector average of 69%, the

company is still exposed to considerable

concentration risks. At the geographic level, despite

the expanded footprint, the company derives three-

quarters of its contract sales from its home markets,

the Pan Bohai Rim and Northeast China.

Contract sales split between PBR/NE and other regions

0%

20%

40%

60%

80%

100%

2008 2009 2010 2011 2012 1H

PBR or NE Other


Similarly, sales are dependent on high profile

launches. Contract sales had been lagging through

May. In June, sales reached an impressive

RMB5.9bn, a historic high for the company, driven

by three new launches. New launches contributed

over 40% of the monthly sales. Not surprisingly, the

sales pace moderated in subsequent months.

June contract sales of recent project launches

Project Launch

dateUnits

launchUnits sold

Amt RMBm

Sell thru rate

Ocean City, Fushun 1-Jun 1900 Ocean Crown, Beijing 9-Jun 158 23 429 15% Ocean Diamond Bay, Dalian 26-Jun 2770 909 1,601 33%

Source: Soufun

Monthly contracted sales run rate

0%

20%

40%

60%

80%

100%

Jan Mar May Jul Sep Nov

2011 2012


Investment concerns

Concentration risk due to continued reliance on two home regions

as well as high-profile project launches

Margin squeeze due to both top-line and bottom-line factors

further down the road

Balance sheet remains constrained in near term; hybrid securities

will dilute earnings due to the lack of capitalization

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For 1H12, the company indicated that it had

saleable resources of RMB25bn from existing

launches, coupled with RMB10bn in new

launches. Of the total saleable resources of

RMB35bn, the company achieved contract sales

of RMB13.7bn, or a sell through rate of 39%. For

2H12, the company has not given guidance on the

amount of saleable resources from new launches.

Instead it intends to stay flexible on projected

launches based on realized sell-through rate.

Using the company-provided launch schedule, we

note the project launches in 1H12 accounted for two-

thirds of the full year projected GFA sold. The three

abovementioned high-profile projects accounted for

about 240,000sqm projected GFA sold, including

one that was fast tracked into 2Q from 3Q.

Projected GFA sold based on launch time

Type Launch date Projected contracted GFA (000 sqm)

Existing n/a 403 438 New Q1 87 94 New Q2 1,169 1,308 New Q3 561 641 New Q4 84 89


While the number of projects for sale and total

sellable resources will be higher in 2H, most rapid

sales generally occur shortly after the launch time.

Hence, we expect a lower sell-through rate in

aggregate for 2H, and for the pace of sales to

moderate.

SG&A as % of contracted sales

(RMBm) 2008 2009 2010 2011

Contracted sales 7,243 14,316 21,603 27,005 Selling & marketing costs 251 318 441 776 as % of contracted sales 3.5% 2.2% 2.0% 2.9% Administrative expenses 420 320 457 820 as % of contracted sales 5.8% 2.2% 2.1% 3.0%


We also examined the sales and marketing

expense, as well as administrative expense as

percentage of contracted sales of each year. Both

ratios rose more than 40% in 2011 after being flat

in previous years.

While the concentration risks remain, we believe

such risks will be gradually mitigated as the

company continues to solidify its nationwide

expansion and diversify its contract sales across a

broader portfolio of cities and projects. The jump

in SG&A costs can be attributed to the geographic

expansion. We expect SG&A costs to revert to a

more normal level once the company fully

engages its enlarged operating platform.

Margin squeeze

We note the company embarked on a shopping spree

in 2010, both in terms of volumes bought as well as

prices paid. While 2009-10 was a period of higher

land prices, an examination of land acquisitions by

city tier revealed that most acquisitions in 2010 were

biased toward lower-tier cities.

Land acquisition by year

Year acquired

Acq cost (RMBm)

Sellable GFA (sqm)

Avg land cost (RMB/sqm)

2004 789 510,000 1,547 2005 776 200,000 3,880 2006 3,974 1,445,000 2,750 2007 9,297 2,802,000 3,318 2008 9,948 5,187,000 1,918 2009 8,282 2,429,000 3,410 2010 29,856 7,446,000 4,010 2011 8,390 3,720,000 2,255 Total 71,311 23,739,000 3,004


The company made two expensive acquisitions in

2010: Ocean Crown in Beijing and Bond Castle in

Shanghai. Excluding these two projects, the

company spent RMB24bn or RMB3,300/sqm for

land plots mostly in lower-tier cities. This is still

10% higher than the aggregate land bank average

of RMB3,000/sqm.

Land acquisition by year and by city tier

Year Tier 1 Tier 2 Tier 3

2004 51% 49% 0% 2005 100% 0% 0% 2006 22% 78% 0% 2007 15% 85% 0% 2008 27% 73% 0% 2009 24% 73% 4% 2010 7% 60% 33% 2011 25% 54% 21%


13


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Not surprisingly, the company appears to be more

competitive in its home market as defined as cities

entered before 2010, mostly in the Bohai Rim and

Northeast Region. We examined the recognized

land cost as percentage of the ASP for historical

years as well as for the 2012 projection. The

company enjoys a 5pts advantage in its home cities.

Recognized land cost as a percentage of ASP

0%

10%

20%

30%

40%

2008 2009 2010 2011 2012e

Year

Lan

d co

st /

ASP

Home Ex pansion

* Home market defined as cities entered before 2010 Source: Company data, HSBC estimates

Given the government’s continued effort to curb

the housing market and projected flat sales for the

company, we expect ASP to moderate slightly

from the current level. Meanwhile, on the top line,

we estimate the company’s booked ASP will peak

in 2013 before dropping slightly in 2014. As

higher land costs filter through, the gross margin

will drop from 2012 onward.

Historical and estimated net gearing

(%)

7177 77

65

49

0

20

40

60

80

100

2010 2011 2012e 2013e 2014e


While the margin squeeze is part of a sector-wide

trend, we believe the company can counter this

risk by focusing on faster asset turn through

quicker project launches and a larger operating

platform. The margin squeeze will also be

partially offset by the growth of rental income

which commands a much higher gross margin.

Historical and projected gross margin

0%

10%

20%

30%

40%

2010 2011 2012e 2013e 2014e

Year

Gro

ss m

argi

n

property dev elopment Aggregate

* Home market defined as cities entered before 2010 Source: Company data, HSBC estimates

Balance sheet constrained Our model shows net gearing rising in 2012-13,

reaching 77% before declining in 2014. This is

projected under the assumptions of a scaled back

land bank acquisition of RMB5bn per year and a

19% CAGR in contracted sales growth from

2012-14e. As a point of reference, the company’s

land bank acquisition averaged RMB13bn per

year over the past five years. Excluding the

spending spree in 2010, the company averaged

acquisitions of RMB8bn per year. Assuming the

company hits its 2012 contract sales target of

RMB27bn, the y-o-y sales growth would be 15%.

In late 2011, Sino-Ocean signed a MOU with

Swire, its JV partner for Chengdu’s Dacisi

project. Under the agreement, Swire acquired an

additional 31% of the project stake and will

advance USD230m to cover an unsettled land

premium and working capital. The agreement

includes a call option for Sino-Ocean and a put

option for Swire to transfer the stake back to Sino-

14


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Ocean at an interest rate of 10%. This amounts to

a shareholder loan. In a similar effort, Sino-Ocean

sold a 20% stake in the CBD Z13 project in

Beijing to China Life in April.

For the 2011 year-end dividend payment, the

company offered a scrip dividend scheme to

shareholder so they could receive additional

shares in lieu of cash. The scrip share was priced

at a 5% discount to the average trading price. The

discount percentages have moved in step with the

company’s net gearing. Therefore we expect the

discount to widen in the coming years.

Scrip share discount by year

0%

2%

4%

6%

8%

10%

12%

2008 2009 2010 2011

0%

20%

40%

60%

80%

Scrip share discount Net gearing


These transactions are indicative of the

company’s efforts to conserve cash and keep

gearing in check. The constrained balance sheet

points to a possibility of share placement. While

such risk exists for many developers in the sector,

certain factors, such as availability of debt

financing and potential growth in contract sales,

should mitigate this for the company. We believe

the company will be able to organically

deleverage through stepped up contract sales.

Hybrid securities impacting earning The company has issued two hybrid securities in

the past: an USD900m perpetual subordinated

(PCB) convertible bond in July 2010 and an

USD400m perpetual subordinated bond (PSS) in

May 2011.

While PCB and PSS provided a cheaper option

for raising capital than equity placements at the

time, as well as being a means to minimize impact

on gearing, they continue to dilute earnings.

As the distributions to hybrid securities are

reported below the tax line, the company cannot

utilize the tax shield offered by traditional debt

financing. While interest incurred from off-shore

borrowings is not directly tax deductible against

on-shore earnings, Chinese developers typically

achieve the same effect by capitalizing 90% or

more of the interest expenses.

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Valued by forward NAV We use an NAV approach as the basis of our

valuation methodology. Under this approach,

using project-specific information such as sellable

GFA, completion schedule, construction cost, pre-

sale schedule and expected ASP, we calculate the

value of each existing or prospective project using

a discounted cash flow method to derive the GAV

of each project. We then deduct the net debt

amount, unpaid land premium and outstanding

LAT liability from the aggregate projected NAV

to derive our 12-month-forward NAV estimate.

In our NAV estimate, we include sites for which

full titles have been obtained. We also include

sites for which the company is applying for land

use rights for which there are no material legal

impediments. We deduct all outstanding land

premiums at today’s value based on the payment

schedule provided by the company.

As of end 2011, the company had a land bank of

24m sqm attributable GFA, including completed

investment properties and properties under

development. The company did not make any

land acquisitions year to date. We have not

accounted for land under primary land

development or a master agreement with local

governments in our NAV calculation, in line with

our valuation approach for other China property

companies under our coverage.

Capital securities, both convertible and perpetual

bonds are treated as debt securities and their par

value is subtracted from the NAV to derive the

value attributed to common shareholders.

NAV methodology We derive our NAV estimate for the company

using our proprietary model, which incorporates

the latest audited balance sheet and earnings data,

as of December 2011, as well as project details

given in the historical public announcements.

We separately list and value each property held by

the company. This enables us to test the

sensitivity of NAV to many variables, such as

property prices, interest rates and discount rates.

Key assumptions used to derive our NAV

estimates are as follows:

ASP assumptions based on what a given

property would fetch if it were sold today.

Sites with land titles as well as sites that

should receive land titles in the next 12

months are included.

Development cost assumptions, such as site

preparation, construction, utility and

Net asset value

12-month-forward NAV per share estimated at HKD8.8

Residential projects account for 86% of GAV with commercial and

hotel properties taking up 9% and 5%, respectively

The Bohai Rim and Northeast projects account for 44% and 29%

of GAV, respectively, making sales highly seasonally

16


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infrastructure, on a project-by-project basis

from financial statements and management’s

account.

A discount rate of 11.64%, representing the

company’s WACC.

Investment properties are valued based on

prevailing cap rates for each property type.

First, we determine the GAV of each project using

a discounted cash flow approach. The expected

cash flows of each project are based on our

estimated contracted sales timeline and

completion schedule, which in turn allows us to

estimate the sales proceeds, construction costs and

other expenses for the year.

We use a WACC of 11.64% as the discount rate.

The WACC is based on a risk-free rate of 3.5%

and an equity risk premium of 10%, with a beta of

1.21. We assume a cost of debt of 7.65% and a

target debt ratio of 40%.

Derivation of WACC

Risk free rate 3.50% Adjusted beta 1.21 Market risk premium 10.00% Cost of equity 15.58% Target debt ratio 40% Cost of debt 7.65% Corporate tax rate 25% WACC 11.64%

Source: HSBC estimates

Second, we deduct minority interests and relevant

taxes for development projects to arrive at an

attributable post-tax GAV. For investment

properties, valuations are made based on

prevailing rents and capitalisation rates for each

property type.

Third, we deduct net debt, capital securities,

outstanding land premium and expected LAT

liabilities to derive our NAV estimate. According to

the company, there is an outstanding land premium

of RMB5bn, all of which will be paid in 2012.

Lastly, we derive the current NAV per share by

dividing the aggregate NAV by the number of

shares outstanding.

NAV estimate (RMBm)

2012e

Development properties / under development Commercial 6,963 Residential 67,348 Investment properties / under development Commercial 10,029 Hotel 796 GAV (excluding LAT) 85,137 Net debt (24,940) Preferred and capital securities (8,502) Outstanding LAT (3,393) Outstanding land premium (5,000) NAV 43,302 Shares outstanding (m) 5,772 NAV per share (RMB) 7.50 NAV per share (HKD) 8.83


Impact of CB conversion We gauge the impact of the CB by assuming full

conversion at end 2012. Given a conversion price

of HKD6.85 per share, issuance size of

USD900m, and a fixed exchange rate of USD1/

HKD7.774, upon a full conversion, the number of

shares would increase 18.2% and reduce NAV by

4.5% per share.

NAV impact of CB conversion

Original Conversion After Change

2012e NAV (RMBm) 46,401 5,945 52,346 Shares outstanding (m) 5,622 1,021 6,643 18.2%

NAV/share (RMB) 8.25 5.82 7.88 NAV/share (HKD) 9.71 6.85 9.27 -4.5%


Sensitivity analysis Our NAV calculation incorporates our best

estimate of ASPs across various projects based on

current sales prices. To assess the impact on NAV

under changing market conditions, we conduct a

sensitivity analysis by varying the ASP as well as

the discount rate.

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Our analysis excludes the impact on properties

largely pre-sold or sold but not yet booked as their

sales prices have been locked in.

As indicated by the NAV sensitivity analysis,

assuming the current discount rate, the NAV

estimate would decrease by 12% and 25% if the

ASP drops by 5% and 10%, respectively.

NAV (HKD/share) sensitivity to WACC and ASP changes

________________Change in ASP _________________ 8.83 -10% -5% 0% 5% 10% 10% 7.42 8.64 9.85 11.04 12.22 11% 6.98 8.16 9.32 10.47 11.62 12% 6.56 7.70 8.83 9.94 11.05 13% 6.16 7.26 8.35 9.43 10.50

WA

CC

14% 5.78 6.84 7.90 8.94 9.98


NAV % sensitivity to WACC and ASP changes

_______________ Change in ASP ________________-10% -5% 0% 5% 10%

10% -15.9% -2.1% 11.6% 25.0% 38.5% 11% -20.9% -7.5% 5.6% 18.7% 31.7% 12% -25.7% -12.8% 0.0% 12.6% 25.2% 13% -30.2% -17.7% -5.4% 6.8% 19.0%

WA

CC

14% -34.6% -22.5% -10.5% 1.3% 13.1%


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Initiate Overweight (V) with target price of HKD5.4 We are initiating coverage on the stock with an

Overweight (V) rating and a target price of

HKD5.4, implying a potential return of 26.3%,

including a dividend yield of 3.6%. We include a

volatility flag as the stock’s monthly average

volatility is 45%. Potential return equals the

percentage difference between the current share

price and the target price, including the forecast

dividend yield when indicated.

Under HSBC’s research model, the Overweight

rating band for volatile Chinese stocks is 10ppt

above the hurdle rate of 10%, or 20% above the

current share price. We therefore have an

Overweight (V) rating on the stock.

Looking across the sector, Chinese property

stocks generally trade at a discount to current

NAV over a long period, given the long inventory

cycle. We observe an average discount of 20%

across the industry, with large players, such as

COLI and China Vanke, generally faring 20pt to

30pt better than smaller players. Currently, the

sector is trading at an average discount of 41%, or

one standard deviation below the historical mean.

Chinese developers’ NAV discount

-80%

-60%

-40%

-20%

0%

20%

40%

60%

2005 2006 2007 2008 2009 2010 2011 2012

% to NAV +1 SD Mean-1 SD -2 SD

Source: Company data, Thomson Reuters Datastream, HSBC estimates

Sino Ocean NAV discount

-100%

-80%

-60%

-40%-20%

0%

20%

40%

Sep-07 Nov -08 Jan-10 Mar-11 May -12% to NAV +1 SDMean -1 SD

Source: Company data, Thomson Reuters Datastream, HSBC estimates

Valuation

We initiate with an Overweight (V) rating and a target price of

HKD5.4

Target discount of 39% based on the historical average discount

since IPO

Potential return of 26.3% with a dividend yield of 3.6%

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While the macro environment is slowing, coupled

with the continuing policy headwinds in the form

of HPR, this is the balanced by the government’s

supportive policy toward end user demand. Given

the company’s success in overcoming its

structural challenge as well as the completion of

its initial expansion programme, we believe an

NAV discount equal to the historical mean is

appropriate. The current share price of HKD4.50

represents more than one and a half standard

deviations below the historical mean.

Target price derivation

12M-forward NAV per share (HKD) 8.8 Historical average NAV discount 39% Monthly standard deviation of historical NAV discount 20% Target historical NAV discount 39% Target price (HKD) 5.40 Current share price (HKD) (Oct 8, 2012) 4.40 Dividend yield 3.6% Potential return 26.3%


Standard deviation for all companies under coverage

SOL

SOHO R&FFranshion

Sino OceanShimaoKWGCGAgile

Yanlord

COLI CRL Longfor

(1.00)

(0.75)

(0.50)

(0.25)

0.00

0.25

0.50

0.75

1.00

Standard dev iation

Deeper

discount to

mean


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Earnings profile Introduction

We derive our earnings forecasts from a financial

model built on historical financial and operating

data provided by the company, our discussions

with management on its financial and operating

expectations, our discussion with project

managers, and our own assumptions.

Our 2012-14 forecasts also rely on the company’s

audited financial results over 2009-11, which

were prepared by PricewaterhouseCoopers.

Revenue lock-in analysis Revenue lock-in ratio analysis

RMBm

Sold but unrecognized revenue, Dec 2011 24,032 Contract sales in 2012 through Aug 2012* 19,057 2012e revenue target** 21,559 2013e revenue target** 25,648 2012e revenue lock in ratio 100% 2013e revenue lock in ratio 84%

*After business tax, ** Property development revenue Source: Company data, HSBC estimates

With RMB24bn in sold but unrecognized revenue at

the end of 2011, and RMB20.2bn contracted sales in

the year to August, the company has locked in 100%

of its 2012e revenue and 84% of its 2013e revenue.

Based on our model, we have identified the

following characteristics to the company’s

earnings picture for 2012-14.

2012 – Focus on Bohai Rim and Northeast Region

The company will derive most of its revenue from

projects in the Bohai Rim and Northeast Region.

In Beijing, we expect Poetry of River Phase I,

Ocean Great Harmony, Ocean La Vie to be major

contributors, providing RMB5bn in revenue. Two

Dalian projects, Ocean Worldview and Ocean

Time, will contribute RMB3.5bn. One large

project outside the company’s traditional strong

base, Ocean Mansion in Hangzhou, will

contribute RMB3bn. Overall, 85% of the property

sales revenue will be from the Bohai Rim and

Northeast Region.

The majority of these projects were acquired

before 2010, hence the land costs were relatively

cheap. We project the gross margin to hold

roughly flat at 31%, the same as 2011.

Earnings analysis

100% and 30% revenue lock-in ratios for 2012e and 2013e,

respectively

Projects from the Bohai Rim and Northeast Region will remain

dominant, accounting for 80% or more of revenues in the near term

Property development gross margin is under pressure, but the

impact is muted by the growth of investment properties

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2013 – Slowly going national

Despite the recent expansion, the Bohai Rim and

Northeast Region will remain dominant with 82%

of revenue contribution in 2013e, down 3pts y-o-

y. Major contributors are Ocean Landscape,

Poetry of River, Ocean Great Harmony, Ocean

Palace in Beijing, Ocean City in Tianjin, and

Ocean World View in Dalian. Projects acquired in

2010 will also begin to contribute, including

Ocean Plaza in Dalian, Quanzhoulu Project in

Qingdao, and Ocean Century in Qinhuangda.

These projects, with a relatively higher land cost

percentage, will cause the project development

margin to decline to 28%.

2014 – Further diversification

Continuing the trend seen in 2013, we estimate

revenue contributions from the Bohai Rim and

Northeast Region will decline to 80%, with cities

in Yantgze River Delta and Southern Region now

making meaningful contributions. Such projects,

including Ocean City in Zhongshan, Ocean

Chanson Mansion in Shanghai and Canal

Business Center Project in Hangzhou now

collectively contribute RMB5.2bn in revenue.

Growing portfolio of investment properties

The company’s portfolio of investment properties

consists of several commercial properties in

Beijing as well as the Shui On Building in

Shanghai, held by its subsidiary Gemini.

We expect rental revenue to grow significantly in

the years ahead. In 2012, the company will add

Indigo to its portfolio. Indigo is a mixed-use project

in Beijing jointly owned by Sino-Ocean and Swire.

It is expected to add 200,000sqm of high quality

commercial space. In 2012, the company will see

the opening of Wyndham Grand Plaza in Dalian. In

2013, the Dacisi Project in Chengdu will open,

adding more than 260,000sqm of commercial

space. The Dacisi Project is also a JV between the

company and Swire.

Estimated core profit by year

RMBm 2012e 2013e 2014e

Core profit 2,496 2,880 3,460 y-o-y growth 14% 15% 20%


Earnings sensitivity Our earnings forecasts use our best estimates of

ASP based on prevailing market conditions with

no price escalation built in. We have performed an

earnings sensitivity analysis showing potential

earning changes with respect to different

residential price assumptions.

We estimate that for a 5% decline in asset prices

over our model assumptions, our net profit

estimates would decline by 3% in 2012, 19% in

2013 and 21% in 2014.

Earnings sensitivity to change in property prices

_______________ Change in ASP ________________-10% -5% 0% 5% 10%

2012e 2,974 2,746 2,496 2,228 1,950 2013e 1,743 2,323 2,880 3,414 3,942

Net

pro

fit

2014e 1,999 2,744 3,460 4,150 4,833


Earnings sensitivity to change in property prices

_______________ Change in ASP ________________-10% -5% 0% 5% 10%

2012e -5% -3% 0% 3% 5% 2013e -39% -19% 0% 19% 37%

Net

pro

fit

2014e -42% -21% 0% 20% 40%


Liquidity and balance sheet Gearing

The company’s gearing ratio (excluding restricted

cash) stood at 71% at the end of 2011. There was

an aggregate amount of unpaid land premium of

RMB5bn at the end of 2011. Assuming no new

acquisition in 2012, we expect gearing to reach

77% in 2012-13, before declining to 65% in 2014.

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Historical and project net gearing

(%)

7177 77

65

49

0

20

40

60

80

100

2010 2011 2012e 2013e 2014e


Source and use

For 2012, we assume contracted sales of

RMB27.1bn, applying a business tax of 5.5% and

a cash collection rate of 95%, in line with the

company’s historical average. Our cash flow

analysis shows a net use of cash of RMB2.1bn,

assuming no new land acquisitions for the year.

2012e source and use analysis (RMBm)

2012e

Source of funds Cash on hand 8,650 Collection from 2012 sales 24,000 Rental revenue less expense 1,600 Use of funds Construction costs 14,500 Unpaid land premium 5,000 Finance cost 2,280 Tax & LAT expenses 2,500 SG&A expenses 1,900 Distribution to PCS, PSS 737 Dividend 762 Net cash position 6,571


The company also carried RMB14.5bn in short-

term loans that need to be refinanced. Among

those, we counted RMB4.4bn term loans,

RMB4.1bn trust loans and RMB6bn in

construction loans. The company raised a new

USD600m term loan in June; the proceeds will be

used to pay off the 2009 term loan when it comes

due in September. The company has indicated that

it has received consent from the lender to extend

the trust loans, as well as refinancing the

construction loans under new projects.

With cash on hand of RMB8.7m and the ability to

roll over most on-shore loans, we don’t see an

immediate need for fundraising, although gearing

will rise in the near term.

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Land bank of 23.5m sqm GFA, sufficient for near to medium-term development As of June 2012, the company had a total

development potential of 23.5m sqm GFA with

attributable GFA of 20m sqm, including

completed units for sale or held for investment,

investment properties under development and land

for development. The current land bank is more

than sufficient to sustain operations in the near to

medium term.

Total land bank

Approx Approx total Remaining total GFA saleable GFA land bank (m sqm) (m sqm) (m sqm)

Completed properties held for sale

4.1 3.6 0.6

Properties under development

11.2 9.3 11.1

Properties held for future development

11.8 9.5 11.8

Total 27.1 22.4 23.5


We define development potential as floor space

that can be offered for sale and hence contribute

to future earnings. The outstanding premium on

land purchased through the auction/tender/listing

process is usually settled by instalments. We

believe there are no major issues preventing the

company from securing the full titles (land-use

rights certificates) and therefore have included the

projects on which it has not yet obtained land use

rights in our land bank analysis.

Land bank biased towards PBR and NE regions; mostly residential projects The current land bank is heavily biased towards

projects in the Pan Bohai Rim and Northeast

Region. These two regions account for 71% and

85% of the total land bank by GFA and GAV,

respectively.

While the company has been diversifying into the

commercial space for the purpose of building a

portfolio of investment properties, residential

projects still account for 83% and 86% of the land

bank by GFA and GAV, respectively.

Land bank analysis

Land bank of 23.5m sqm GFA with attributable interest of 20m

sqm; estimated aggregate land cost of RMB3,062/sqm

Land bank distributed across 54 projects and 19 cities; 62% of

GFA located in tier-2 cities

Residential projects account for 83% by GFA and 86% by GAV;

PBR and Northeast account for 71% by GFA and 85% by GAV

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Land bank by geographical location

PBR

47%

YRD

19%

PRD

10%

Beijing

11%

NE

13%

PBR=Pan Bohai Rim, YRD=Yangtze River Delta & Along Yangtze River, PRD=Pan Pearl River Delta and NE= Northeast Region Source: Company data

Land bank GFA by type

Commercial17%

Res83%


Land bank GAV by region

PBR

55%Northeast

30%

YRD

11%

Western

3%

Central

0%

Southern

1%


GAV by type

Residential86%

Commercial9%

Hotel5%


Land bank GFA by city tier

Tier -3

19%

Tier -1

19%

Tier -2

62%


Land bank GFA breakdown

Properties

held for

future devt.

48%

Properties

under devt.

35%

Completed

properties

held for

sale

17%

Properties

held for

future devt.

48%

Properties

under devt.

35%

Completed

properties

held for

sale

17%


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Company background Incorporated and listed in 2007, Sino-Ocean

develops mid-range to high-end residential

properties, premium office and retail space, and

hotels in China. Its origin can be tracked back to

COSCO Real Estate Development Corp

(COSRED Corp), which was established as an

SOE in 1993, and was a real estate management

and investment vehicle for the COSCO Group.

Sinochem Group became a major shareholder in

2002. Sino-Ocean introduced six new investors

in 2006: Morgan Stanley Real Estate Special

Situations Fund 3, Standard Chartered Bank,

IFR, Talent Ocean, Merrill Lynch and Credit

Suisse Group. Pacific Alliance also acquired an

equity interest in Sino-Ocean the same year.

After major shareholding restructuring in 2010,

China Life became the largest shareholder of

the group, with NFD being the second largest.

Company overview

Founded in 1993, listed in 2007, with China Life and Nan Fung

Development as major shareholders

Strong presence in the Pan Bohai Rim and Northeast Region

Experienced management, and high-quality products and services

Group structure (as of 31 August 2012)

14.04%

Sino-Ocean Land Holdings Limited (3377)

Sino-Ocean Land Limited Sino-Ocean Land (Hong Kong) Limited

24.76% 61.20%

China Life Insurance Company Limited Nan Fung Group Public Shareholders

Business Divisions and Subsidiary Companies

100% 100%

14.04%

Sino-Ocean Land Holdings Limited (3377)

Sino-Ocean Land Limited Sino-Ocean Land (Hong Kong) Limited

24.76% 61.20%

China Life Insurance Company Limited Nan Fung Group Public Shareholders

Business Divisions and Subsidiary Companies

100% 100%


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Since its listing, Sino-Ocean has grown its land

bank from 9m sqm attributable GFA in six cities

in 2007 to about 21m sqm attributable GFA

(total land bank 24m sqm GFA) across 19 cities

as of December 2011.

Over the past 20 years, Sino-Ocean has

established a strong presence in Beijing and the

Pan Bohai Rim region, where it has 14m sqm

GFA (or about 60% of land bank). Sino-Ocean

has a completed investment property portfolio

of 0.32m sqm GFA in Beijing and Shanghai.

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Summary of management team

Name Age Years at group

Current job responsibility

Executive Directors Li Ming 48 15 Current role – Chairman of the board and the Chairman of Investment Committee of the board of the company

Past roles in Sino-Ocean – General Manager and Chief Executive Officer Roles in other companies/subsidiaries – Mr Li serves as the Chairman, legal representative, a Director or a General

Manager of a number of Sino-Ocean’s subsidiaries and project companies. Qualification – Mr Li graduated in July 1985 from Jilin Industrial University with a degree in Motor Vehicle

Transportation. He has a Master’s degree in Business Administration from the China Europe International Business and obtained a senior engineer qualification.

Wang Xiaoguang 48 4 Current role –Chief Operating Officer of the company Past roles in Sino-Ocean – na Roles in other companies/subsidiaries – Mr Wang serves as Chairman and/or legal representative of a number of

Sino-Ocean’s subsidiaries and project companies. Qualification – Mr Wang graduated in July 1986 from Jilin Industrial University with a degree in Machinery. In June

2005, he obtained a Master’s degree in Business Administration from Dongbei University of Finance and Economics. Chen Runfu 47 17 Current role – Vice President and a member of the Investment Committee of the board of the company

Past roles in Sino-Ocean – na Roles in other companies/subsidiaries – Mr Chen serves as a Director or a General Manager of a number of Sino-

Ocean’s subsidiaries and project companies. Qualification – Mr Chen graduated in July 1986 from Dalian Institute of Technology with a degree in Harbour and

Channel Engineering; In September 2005, he obtained a Master’s degree in Business Administration from the China Europe International Business School.

Non-Executive Directors Liu Hui 42 3 Current role – General Manager of Investment management of China Life & Non-Executive director

Past roles in Sino-Ocean – na Roles in other companies – General Manager and Deputy General Manager of China Life Insurance Asset

Management Company Limited and a division head of the headquarters of China Construction Bank. In February 2009, she was appointed General Manager of investment management department of China Life Insurance Company Limited (“China Life”).

Qualification – Ms Liu graduated in July 1992 from the Renmin University of China in Economics. In June 2000, she obtained a Master’s degree in Business Administration from the Tsinghua University.

Yang Zheng 42 1 Current role – General Manager of finance department & Non-Executive director

Past roles in Sino-Ocean –.na

Roles in other companies – In July 2005, Mr Yang joined China Life as assistant to the General Manager of finance department. In October 2006 he was promoted to Deputy General Manager. Since March 2009, he was General Manager for the finance department of China Life. Before joining China Life, he worked at China North Industries Corp from August 1993 to August 1998. Mr Yang also worked at Molex Inc. in USA from July 2000 to June 2005 as senior financial analyst.

Qualification – Mr Yang graduated in 1993 from Beijing University of Technology. In 2000, he obtained a Master’s degree in Business Administration from Northeastern University.

Cheung Vincent Sai Sing 31 1 Current role – Director of Nan Fung Development & Non- Executive director

Past roles in Sino-Ocean – na

Roles in other companies – Director of Nan Fung Development since 2009. Before this, he was a vice president at Barclays Capital Asia Limited (2008-2009) and Citigroup Global Markets Asia Limited (2004-2008).

Qualification – Mr Cheung graduated in 2003 from the University of California, Berkeley with a degree in Molecular and Cell Biology.

Independent Non-Executive Directors

Name Age Years at Group


Tsang Hing Lun 62 5 Current role – Chairman of the audit committee, Member of the Investment Committee of the board of the company and Non-Executive director

Past roles in Sino-Ocean – na Roles in other companies – Mr Tsang currently act as an Independent Non-Executive director and Chairman of audit

committee of Sinotrans Shipping Limited, Beijing Media Corporation Limited and China Rongsheng Heavy Industries Group Holdings Limited. He is also an Independent Non-Executive director of China GrenTech Corporation Limited. He also served in a senior management capacity in several public listed companies: Assistant General Manager in Hang Seng Bank; Vice President in UOB Group; an executive director of China Champ Group in 1994, as an alternate Chief Executive and a Deputy General Manager of the China Construction Bank, Hong Kong Branch.

Qualification – Mr Tsang graduated in 1973 from Chinese University of Hong Kong with a degree in Business Administration.

Summary of management team background

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Summary of management team

Name Age Years at group


Gu Yunchang 67 5 Current role – Member of the audit committee, Remuneration and Nomination Committee and the Investment Committed of the Board of the Company & Non-Executive Director

Past roles in Sino-Ocean – na Roles in other companies – Mr Gu acts as an Independent Director of E-House (China) Holdings Limited and

Independent Non-Executive director of Shimao Property Holdings Limited. He also served as Vice-President and the secretary general of China Real Estate Association. In 2006, he was appointed Vice-Chairman of the China Real Estate Association Research in PRC.

Qualification – na Han Xiaojing 57 5 Current role – Chairman of Remuneration and Nomination Committee; Member of the audit committee and the

Investment Committee of the Board of the Company & Non-Executive Director Past roles in Sino-Ocean – na Roles in other companies – Mr Han currently serves as an independent director of Shenzhen Overseas Chinese Town

Holding Company. He has been an independent non-executive director of Far East Horizon Limited and a supervisor of Beijing Capital International Airport Company Limited.

Qualification – In 1985, Mr Han received his Master’s degree in Law from the China University of Political Science and Law.

Zhao Kang 63 5 Current role – Member of the Remuneration and Nomination Committee and the Investment Committed of the Board of the Company & Non-Executive Director

Past roles in Sino-Ocean – na Roles in other companies – Mr Zhao currently serves as a member of the Eleventh Committee of the Chinese People’s

Political Consultative Conference and has been an independent director of Beijing Capital Co. Ltd. Qualification – Mr Zhao graduated in 1975 from the Department of Construction at the Tsinghua University.

Senior Management

Name Age Years at Group


Li Jianbo 49 3 Current role – Vice President Past roles in Sino-Ocean– na Roles in other companies – Mr Li was the Chairman and an Executive director of Gemini Investments (Holdings)

Limited. Qualification – Mr Li graduated in July 1985 from the Tsinghua University with a degree in Computer Engineering. In

August 2000, he obtained a Master’s degree in Business Administration from the State University of New Jersey . Xu Li 50 15 Current role – Vice President

Past roles in Sino-Ocean– na

Roles in other companies – na

Qualification – Mr Xu graduated in December 1992 from the Liaoning Radio and Television University with a degree in Industrial and Residential Construction; In September 2000, he obtained Master’s degree in Business Administration from Cheung Kong Graduate School of Business.

Zhou Tong 48 9 Current role – Vice President Past roles in Sino-Ocean –na Roles in other companies – na Qualification – Mr Zhou graduated in July 1986 from the Tongji University with a degree in Architecture. In September

2009, he obtained a Master’s degree in Business Administration from the China Europe International Business School. Sum Pui Ying, Adrian 50 5 Current role – Chief Financial Officer and Company Secretary

Past roles in Sino-Ocean – na Roles in other companies – Mr Sum act as a Chairman and a Non-Executive Director of Gemini Investments

(Holdings) Limited. Qualification – Mr Sum graduated in 1988 from the Hong Kong Polytechnic University with a degree in Accounting. In

1991, he obtained a Master’s degree in Business Administration from the University of Wales, and was awarded a Diploma in Legal Studies from the University of Hong Kong in 1996.

Chen Zuyuan 50 9 Current role – Vice President Past roles in Sino-Ocean – na Roles in other companies – na Qualification – Mr Chen graduated in July 1983 from the Hunan University with a degree in Industrial and Civil

Construction. In September 2006, he obtained a Master’s degree in Business Administration from the China Europe International Business School.

Lu Zhijun 43 3 Current role – Vice President Past roles in Sino-Ocean – na Roles in other companies – na Qualification – In June 2006, Mr Lu obtained a Master’s degree in Business Administration from the Dongbei University

of Finance and Economics. Source: Company data

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Recent changes to CIRC rules governing real estate investment by insurance companies

Appendix

Changes to CIRC rules related to real estate investments

Sep 5, 2010, Circular 80 July 25, 2012, Circular 59

Solvency ratio 8.4 No less than 150% 1.1 No less than 120% Net earning 8.5 Greater than RMB100mn 1.1 No requirement Cap on total real estate related investments

14.1 An insurance company's investments in non self use real estate or real estate related financial products cannot exceed 10% of the total assets of the preceding quarter. In addition, investments in real estate related financial products are subject to a cap of 3%.

1.9 An insurance company's investments in non self use real estate, infrastructure projects or real estate related financial product cannot exceed 20% of the total assets of the preceding quarter. In addition, non self use real estate investments are subject to a cap of 15%, while infrastructure projects or real estate related financial products are subject to a cap of 20%.

Cap on total investment in a single project

14.2 Investments in any single real estate project cannot exceed 50% of the total project expenditure. Investments in real estate related financial products cannot exceed 20% of the total issuance.

1.9 An insurance company's investments in non self use real estate, infrastructure projects cannot exceed 50% of total investment in the project; investment in real estate related financial products cannot exceed 20% of the total issuance. However, collective investments from affiliated parties (parent, subsidiary) can reach 60% of the total issuance.

Cap on shareholder loans

Not specified 2.4 If an insurance company is an equity investor in a project, the project company can use its assets as collaterals to obtain shareholder loans from the insurance company, assuming the amount is less than 40% of the project's total investment.

Source: CIRC

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Notes

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Notes

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Disclosure appendix Analyst Certification The following analyst(s), economist(s), and/or strategist(s) who is(are) primarily responsible for this report, certifies(y) that the opinion(s) on the subject security(ies) or issuer(s) and/or any other views or forecasts expressed herein accurately reflect their personal view(s) and that no part of their compensation was, is or will be directly or indirectly related to the specific recommendation(s) or views contained in this research report: Derek Kwong and Phillip Zhong

Important disclosures

Stock ratings and basis for financial analysis HSBC believes that investors utilise various disciplines and investment horizons when making investment decisions, which depend largely on individual circumstances such as the investor's existing holdings, risk tolerance and other considerations. Given these differences, HSBC has two principal aims in its equity research: 1) to identify long-term investment opportunities based on particular themes or ideas that may affect the future earnings or cash flows of companies on a 12 month time horizon; and 2) from time to time to identify short-term investment opportunities that are derived from fundamental, quantitative, technical or event-driven techniques on a 0-3 month time horizon and which may differ from our long-term investment rating. HSBC has assigned ratings for its long-term investment opportunities as described below.

This report addresses only the long-term investment opportunities of the companies referred to in the report. As and when HSBC publishes a short-term trading idea the stocks to which these relate are identified on the website at www.hsbcnet.com/research. Details of these short-term investment opportunities can be found under the Reports section of this website.

HSBC believes an investor's decision to buy or sell a stock should depend on individual circumstances such as the investor's existing holdings and other considerations. Different securities firms use a variety of ratings terms as well as different rating systems to describe their recommendations. Investors should carefully read the definitions of the ratings used in each research report. In addition, because research reports contain more complete information concerning the analysts' views, investors should carefully read the entire research report and should not infer its contents from the rating. In any case, ratings should not be used or relied on in isolation as investment advice.

Rating definitions for long-term investment opportunities

Stock ratings HSBC assigns ratings to its stocks in this sector on the following basis:

For each stock we set a required rate of return calculated from the cost of equity for that stock’s domestic or, as appropriate, regional market established by our strategy team. The price target for a stock represents the value the analyst expects the stock to reach over our performance horizon. The performance horizon is 12 months. For a stock to be classified as Overweight, the potential return, which equals the percentage difference between the current share price and the target price, including the forecast dividend yield when indicated, must exceed the required return by at least 5 percentage points over the next 12 months (or 10 percentage points for a stock classified as Volatile*). For a stock to be classified as Underweight, the stock must be expected to underperform its required return by at least 5 percentage points over the next 12 months (or 10 percentage points for a stock classified as Volatile*). Stocks between these bands are classified as Neutral.

Our ratings are re-calibrated against these bands at the time of any 'material change' (initiation of coverage, change of volatility status or change in price target). Notwithstanding this, and although ratings are subject to ongoing management review, expected returns will be permitted to move outside the bands as a result of normal share price fluctuations without necessarily triggering a rating change.

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*A stock will be classified as volatile if its historical volatility has exceeded 40%, if the stock has been listed for less than 12 months (unless it is in an industry or sector where volatility is low) or if the analyst expects significant volatility. However, stocks which we do not consider volatile may in fact also behave in such a way. Historical volatility is defined as the past month's average of the daily 365-day moving average volatilities. In order to avoid misleadingly frequent changes in rating, however, volatility has to move 2.5 percentage points past the 40% benchmark in either direction for a stock's status to change.

Rating distribution for long-term investment opportunities

As of 08 October 2012, the distribution of all ratings published is as follows: Overweight (Buy) 47% (28% of these provided with Investment Banking Services)

Neutral (Hold) 38% (26% of these provided with Investment Banking Services)

Underweight (Sell) 15% (20% of these provided with Investment Banking Services)

Share price and rating changes for long-term investment opportunities

Sino Ocean Land Holdings (3377.HK) Share Price performance HKD Vs HSBC

rating history

1

3

5

7

9

11

13

15

Oct

-07

Oct

-08

Oct

-09

Oct

-10

Oct

-11

Oct

-12

Source: HSBC

Recommendation & price target history

From To Date

N/A Overweight (V) 09 November 2009 Overweight (V) Neutral (V) 22 March 2010 Neutral (V) Underweight (V) 23 July 2010 Underweight (V) N/A 30 August 2010 Target Price Value Date

Price 1 10.50 09 November 2009 Price 2 9.50 30 December 2009 Price 3 7.24 22 March 2010 Price 4 5.50 23 July 2010 Price 5 N/A 30 August 2010

Source: HSBC

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HSBC & Analyst disclosures Disclosure checklist

Company Ticker Recent price Price Date Disclosure

SINO OCEAN LAND HOLDINGS 3377.HK 4.49 05-Oct-2012 7Source: HSBC

1 HSBC* has managed or co-managed a public offering of securities for this company within the past 12 months. 2 HSBC expects to receive or intends to seek compensation for investment banking services from this company in the next

3 months. 3 At the time of publication of this report, HSBC Securities (USA) Inc. is a Market Maker in securities issued by this

company. 4 As of 31 August 2012 HSBC beneficially owned 1% or more of a class of common equity securities of this company. 5 As of 31 August 2012, this company was a client of HSBC or had during the preceding 12 month period been a client of

and/or paid compensation to HSBC in respect of investment banking services. 6 As of 31 August 2012, this company was a client of HSBC or had during the preceding 12 month period been a client of

and/or paid compensation to HSBC in respect of non-investment banking securities-related services. 7 As of 31 August 2012, this company was a client of HSBC or had during the preceding 12 month period been a client of

and/or paid compensation to HSBC in respect of non-securities services. 8 A covering analyst/s has received compensation from this company in the past 12 months. 9 A covering analyst/s or a member of his/her household has a financial interest in the securities of this company, as

detailed below. 10 A covering analyst/s or a member of his/her household is an officer, director or supervisory board member of this

company, as detailed below. 11 At the time of publication of this report, HSBC is a non-US Market Maker in securities issued by this company and/or in

securities in respect of this company Analysts, economists, and strategists are paid in part by reference to the profitability of HSBC which includes investment banking revenues.

For disclosures in respect of any company mentioned in this report, please see the most recently published report on that company available at www.hsbcnet.com/research.

* HSBC Legal Entities are listed in the Disclaimer below.

Additional disclosures 1 This report is dated as at 09 October 2012. 2 All market data included in this report are dated as at close 08 October 2012, unless otherwise indicated in the report. 3 HSBC has procedures in place to identify and manage any potential conflicts of interest that arise in connection with its

Research business. HSBC's analysts and its other staff who are involved in the preparation and dissemination of Research operate and have a management reporting line independent of HSBC's Investment Banking business. Information Barrier procedures are in place between the Investment Banking and Research businesses to ensure that any confidential and/or price sensitive information is handled in an appropriate manner.

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Disclaimer * Legal entities as at 8 August 2012 ‘UAE’ HSBC Bank Middle East Limited, Dubai; ‘HK’ The Hongkong and Shanghai Banking Corporation Limited, Hong Kong; ‘TW’ HSBC Securities (Taiwan) Corporation Limited; 'CA' HSBC Bank Canada, Toronto; HSBC Bank, Paris Branch; HSBC France; ‘DE’ HSBC Trinkaus & Burkhardt AG, Düsseldorf; 000 HSBC Bank (RR), Moscow; ‘IN’ HSBC Securities and Capital Markets (India) Private Limited, Mumbai; ‘JP’ HSBC Securities (Japan) Limited, Tokyo; ‘EG’ HSBC Securities Egypt SAE, Cairo; ‘CN’ HSBC Investment Bank Asia Limited, Beijing Representative Office; The Hongkong and Shanghai Banking Corporation Limited, Singapore Branch; The Hongkong and Shanghai Banking Corporation Limited, Seoul Securities Branch; The Hongkong and Shanghai Banking Corporation Limited, Seoul Branch; HSBC Securities (South Africa) (Pty) Ltd, Johannesburg; HSBC Bank plc, London, Madrid, Milan, Stockholm, Tel Aviv; ‘US’ HSBC Securities (USA) Inc, New York; HSBC Yatirim Menkul Degerler AS, Istanbul; HSBC México, SA, Institución de Banca Múltiple, Grupo Financiero HSBC; HSBC Bank Brasil SA – Banco Múltiplo; HSBC Bank Australia Limited; HSBC Bank Argentina SA; HSBC Saudi Arabia Limited; The Hongkong and Shanghai Banking Corporation Limited, New Zealand Branch incorporated in Hong Kong SAR

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Telephone: +852 2843 9111

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Banks

Europe Robin Down Analyst, Global Sector Head, Banks +44 20 7991 6926 [email protected]

Monica Patrascu +44 20 7991 6828 [email protected]

Peter Toeman +44 20 7991 6791 [email protected]

Rob Murphy +44 20 7991 6748 [email protected]

Iason Kepaptsoglou +44 20 7991 6722 [email protected]

Lorraine Quoirez +44 20 7991 6667 [email protected]

Johannes Thormann Global Head of Exchanges +49 211 910 3017 [email protected]

CEEMEA Gyorgy Olah Head of Ceemea Banks Research +44 20 7991 6709 [email protected]

Aybek Islamov +44 20 7992 3624 [email protected]

Tamer Sengun +90 212 376 46 15 [email protected]

Jan Rost +27 11 676 4209 [email protected]

Latin America Victor Galliano +1 212 525 5253 [email protected]

Paulo E Ribeiro Diversified Financial Services +1 212 525 4430 [email protected]

Mariel Santiago Financials +1 212 525 5418 [email protected]

Felipe Rodrigues +55 11 3847 9029 [email protected]

Asia Todd Dunivant Analyst, Head of Banks, Asia-Pacific +852 2996 6599 [email protected]

York Pun +852 2822 4396 [email protected]

Eric Mak +852 2996 6585 [email protected]

Kathy Park +82 2 3706 8755 [email protected]

Sachin Sheth +91 22 2268 1224 [email protected]

Tejas Mehta +91 22 2268 1243 [email protected]

Kar Weng Loo +65 6658 0621 [email protected]

Xiushi Cai +65 6658 0617 [email protected]

Bruce Warden +8862 6631 2868 [email protected]

Insurance

Europe Kailesh Mistry Analyst, Head of European Insurance +44 20 7991 6756 [email protected]

Dhruv Gahlaut +44 207 991 6728 [email protected]

Steven Haywood +44 207 991 3184 [email protected]

Thomas Fossard +33 1 56 52 43 40 [email protected]

Asia James Garner Analyst, Head of Asian Insurance +852 2822 4321 [email protected]

Michael Chang +852 2996 6555 [email protected]

Grace Zhou +852 2822 3053 [email protected]

Sinyoung Park +822 3706 8770 [email protected]

Real Estate

Europe John Fraser-Andrews Head of Real Estate Equity Research, Europe +44 20 7991 6732 [email protected]

Thomas Martin +49 211 910 3276 [email protected]

Stéphanie Dossmann +33 1 56 52 43 01 [email protected]

Asia Derek Kwong Head of Real Estate Equity Research, Asia +852 2996 6629 [email protected]

Ashutosh Narkar +91 22 2268 1474 [email protected]

Michelle Kwok +852 2996 6918 [email protected]

Phillip Zhong +852 2996 6535 [email protected]

Perveen Wong +852 2996 6571 [email protected]

Stanley Cheung +852 2822 4395 [email protected]

Pratik Burman Ray +65 6658 0611 [email protected]

David Choo +65 6658 0612 [email protected]

Abel Lee +8862 6631 2866 [email protected]

CEEMEA Levent Bayar +90 212 376 46 17 [email protected]

Credit Research Banks and Insurance

Asia Dilip Shahani Analyst, Head of Global Research, Asia-Pacific +852 2822 4520 [email protected]

Devendran Mahendran Sovereigns and Financial Institutions +852 2822 4521 [email protected]

North America Van Hesser Global Head of Credit Research, US Banks +1 212 525 3114 [email protected]

Arjun Bowry Associate +1 212 525 3119 [email protected]

Specialist Sales Nigel Grinyer +44 20 7991 5386 [email protected]

Martin Williams +44 20 7991 5381 [email protected]

Juergen Werner +49 211 910 4461 [email protected]

Jonathan Weetman +44 20 7991 5939 [email protected]

Matthew Robertson +44 20 7991 5077 [email protected]

Global Financial Institution Group Research Team Carlo Digrandi Global Head of Financial Institutions Research +44 20 7991 6843 [email protected]

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