by winston » Tue Sep 12, 2017 7:10 am
<Research Report>C Suisse: Starter Homes Pose Negative Impact on Developers in Long Term; CK PROPERTY Looks Defensive
Credit Suisse, in its report, said Hong Kong government planned to introduce starter homes.
If home ownership scheme (HOS) continues at the same time, subsidised housing will benefit around 85% households in Hong Kong.
Based on the affordability ratio of 40% and considering the higher mortgage loan rate in the future, Credit Suisse estimated the price of starter homes to be 23%-45% below the price of private residential flats currently.
The impact on developers will depend on the price level, restrictions on transactions, quantity and sustainability of the plan.
Credit Suisse believed that the starter homes plan will be negative to developers in the long term.
Developers with farmland in New Territories or lower exposure in small flats will be less affected.
CK PROPERTY (01113.HK) looks more defensive to Credit Suisse, thus rated Outperform with target price of $75.3, while HENDERSON LAND (00012.HK) is the most sensitive to farmland conversion policy, thus rated Underperform with target price of $41.8.
Source: AAStocks Financial News
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