高盛对宝龙地产首次关注研究报告（全英文版）

　　Source of opportunity

　　We initiate coverage on Powerlong with a Buy rating and 12-month NAV-

　　based target price of HK$3.46 (33% upside potential). As a niche developer

　　focused on retail properties (60% of total 2010E NAV) in China’s emerging

　　cities, Powerlong offers the best proxy to take advantage of fast-growing

　　consumption on favorable macro trends there, in our view. Its low land

　　cost (10% of ASP vs. peers’ 23%) should provide sufficient buffer to

　　mitigate execution challenges stemming from its rapid cross-regional

　　expansion and the launch of much larger-scale of retail mall operations in

　　the next three years. 

　　Catalyst

　　We think the following key catalysts will help narrow the share price discount

　　to NAV:  1) Rental rate improvement of its shopping malls. We note the recent

　　rental rate achieved by the company for its Qingdao mall is on an upward trend

　　and we expect this to continue. 2)  Potential land acquisitions: We expect

　　Powerlong to conclude some new acquisi tions in the next few months for

　　which it has already signed MOUs and locked in low land prices. 3) Continuing

　　strong execution in property sales,  leading to better visibility on 2010

　　earnings growth. In the first 10 months of 2009, the company achieved Rmb1.9

　　bn contract sales, about 79% of our full-year forecast. 

　　……