Stable policy tone from the 18th congress conference stimulates release ofpend-up demand in November. Strong sales in the month, which is atraditional weak season, indicated there are still huge genuine demandpending unleash in China. We believe Hopefluent is well positioned tocapture the growth of property sector and could be immune from marginsqueezing, which is haunting the property developers. The stock rose19.8% since the early November. Upside is opening up on strongfundamentals. Maintain our BUY rating with target price of HK$3.05.
Solid fundamentals with upbeat commission rate and transaction valuefor the primary property sales business. Per our channel chat, the currentcommission rate that paid by property developers to the sales agentsmaintains at 1.00-1.02%. Such a level is 3-5bp higher than our expectation.
In our financial model, we forecast Hopefluent to achieve commission rate of0.97% in FY12.Favorable industrial specialization trend helps the real estateagents to retain bargaining power against property developers.
For another key performance indicator, transaction value, we currently expectit more likely to hit management guidance of Rmb120bn given strong salesmomentum. In our financial model, we assume it at Rmb112bn, which is 7.0%lower.
Primary property business serves as the major revenue stream of the group asit contributes 60% to 70% of total revenue. Given stronger-than-expectedperformance of this business segment, earnings risk of the group in FY12 isin upside.
Outperformance since the early November with technical breakthroughon 28th November. Hopefluent rose 19.8% since the early November,outperforming HSI by 19.2% and property developers by 6.3%. Also, thestock made a new year-high level at HK$2.65 on Nov 28.
Positive view from Value Partners. Value Partners bought Hopefluent atcost HK$2.22-2.28/share in November, increasing their stake from 4.9% to6.0%.
Stable policy tone from the 18th Congress conference ceremony release ofpend-up demand in November. Strong sales in the month, which is atradial weak season, is there still huge genuine demandpending unleash in China. We believe Hopefluent is well done to capture the growth of property sector and could be stolen from marginsquefied, which is haunting the property developers. The stock rose 19.8% since the early November. Fears is opening up on Strongfundamentals. Maintain our BUY rating with target price of HK$3.05.
Solid Fundamentals with Upbeat Commission Rate and Transaction Value for the Primary Property Sales Business. Per our channel chat, the currentcommission rate that paid by property developers to the sales agentsmaintance at 1.00-1.02%. Such a level is 3-5 bp higher than our level.
In Our Financial Model, We Forecast Hopefluent to Incentive Commission Rate of 0.97% in FY12.Industrial Specialization Trend Rendering The Real Estate Agents to Retain Bargaining Power Against property developers.
For Another Key Performance Indicator, Transaction Value, We Expect More Expectations to Hit Management Guidance of RMB120BN Given Strong Salesmomentum. In our financial model, we assume it at rmb112bn, which is 7.0% lower.
Primary property business revenue stream as the major revenue stream of the group asit revenue 60% to 70% of total revenue. Given Stronger-Than-ExpectedPerformance of This Business Segment, Stronger Risk of the Group in FY12 Isin Objectives.
Outperformance since the early November with technical breakthroughon 28th November. Hopefluent Rose 19.8% since the early November, outperforming HSI by 19.2% and property developers by 6.3%. Also, thestock made a new high level at HK$2.65 on Nov28.
Positive view from Value Partners. Value Partners interested Hopefluent atcost HK$2.22-2.28/share in November, decided their stake from 4.9% to 6.0%.
