Shimao Property Recommended, RHB Osk's Ho Says

The transcript discusses the debt levels and repayment abilities of companies in the housing sector, highlighting the differences between large, mid-cap, and smaller developers. It explores the systemic risk posed by the housing market and the role of government intervention. The analysis includes balance sheet compositions, currency issues, and the impact of renminbi depreciation. Financing costs for developers are examined, along with the significance of shantytown redevelopment projects. Finally, investment opportunities in specific Chinese regions are discussed, emphasizing the importance of financial health and gearing.

What is a key reason large and mid-cap developers can manage their debt effectively?

• They have diverse financing channels and projects.

• They rely solely on local financing.

• They avoid incurring any debt.

• They have fewer projects.

What is the government's role in the Chinese housing market?

• It intervenes to prevent a market meltdown.

• It encourages a full-blown meltdown.

• It only focuses on small developers.

• It has no control over the market.

Why are investors concerned about the repayment abilities of developers?

• The renminbi is depreciating against the US dollar.

• Developers have no onshore bonds.

• The renminbi is appreciating against the US dollar.

• Developers have no foreign currency debt.

What is the impact of the government's shantytown redevelopment projects?

• They are solely managed by local governments.

• They have no impact on the market.

• They increase land supply, especially in city centers.

• They decrease land supply.

What is a significant change in decision-making for shantytown projects?

• Decisions are left to individual developers.

• Decisions are now made by local governments.

• Decisions are centralized to the central government.

• Decisions are made by international bodies.

Which regions are highlighted as exciting for growth in China?

• Northern China and Western China

• Eastern China and the Greater Bay Area

• Southern China and the Yellow River Basin

• Central China and the Yangtze River Delta

What is a concern for investors besides earnings and sales growth?

• The number of projects

• The size of the company

• The location of the headquarters

• The financial positions and credit risk