机构：招银国际

　　评级：买入

　　目标价：HK$9.02

　　A premium Bay Area player. Times China is a Guangzhou-based developer which mainly focuses on Guangzhou and Foshan. With detailed coordinated development plan to be published soon, we hold firm on the development value of the Greater Bay Area (GBA). As of 30 Jun 2018, Times China had a total land bank of 18.20mn sq.m. Average land cost was Rmb3,195/sq.m, which was 18.9% of 8M18 ASP. As 58.5% of land bank is located in the GBA and the GBA contributed 91.2% sales in 1H18, Times China is a typical Bay-theme developer.

　　Benefit from regional integration. We look forward to the upcoming GBA Coordinate Plan which will further stimulate local econy and support Time China’s local penetration. Furthermore, 1/3 of the Company’s land bank is located in Qingyuan. Although Qingyuan is not included in the Bay Area Initiative, it is still within 1-hour-driving radius from Guangzhou. Recently, governments of Guangzhou and Qingyuan jointly issued the “Work Plan for the Development of High-quality Integrated Development of Guangqing” (《高质量推进广清一体化发展工作方案》). We expect the Company’s portfolio in Qingyuan will also benefit from integration of Guangzhou and Qingyuan.

　　Strong redevelopment pipeline. Times China has put a lot of effort into in Guangzhou and Foshan. Early involvement in urba redevelopment has given the Company a strong operation and pipeline i Guangzhou/Foshan. Currently, 70 urban redevelopment projects with 19.5mn sq.m planned GFA are on track. Of which, 30 projects of land use conversion are likely to be completed in 2018-20, with planned GFA of 5.62mn sq.m. Guangdong has a comprehensive and refined regulation regarding the “Thre Olds” Transformation (Old factories, Old villages, Old towns) (三旧改造). We believe a policy-friendly environment will provide better transparency and more certainty in redevelopment projects.

　　Initiate with BUY. We forecast revenue to be Rmb31.0bn, Rmb40.5bn and Rmb52.5bn in 2018-20, respectivelyrepresenting a CAGR of 32%. Core net profit is projected to be Rmb3.5bn, Rmb4.3bn and Rmb5.8bn in 2018-20, respectively, representing 2017-20 CAGR of 34.4%. Currently, the counter is trading at 2.9/2.5x FY18/19E PER, lower than other bay-theme developers. W estimate end-18 NAV per share to be HK$18.04. Given 50% discount, we derive our TP at HK$9.02, implying 34.6% upside potential. Initiate with BUY.