Weekly Property Sales Flash (13-19 February 2012) 20 February 2012

China/Hong Kong China Property Weekly Property Sales Flash (13-19 February 2012) 20 February 2012 Recovery now more likely Property sales in ten major Chinese cities continued to recover over the past week, with GFA sold growing 45.0% WoW. Growth in transaction volume was mainly due to declining ASP, which made housing more affordable. The Yangtze River delta region led the growth, with average volume growth of 78%, with Hangzhou recording growth of 214%. Volume in the area remained at a relatively low level compared with 2011 due to the continuance of tightening policies. 50bp cut in RRR. On 18 February 2012 the PBOC announced a 50bp cut in the reserve requirement ratio (RRR), effective 24 February 2012. The gradual loosening of credit in China together with additional cuts in property prices is likely to further the recovery within China s property market. Price-cutting to attract sales. After the Chinese New Year holidays, developers cut prices in Beijing and Nanjing by around 10% and 15%, respectively. We expect further price-cutting to take place in China s more competitive property markets like Tianjin. Amended ordinary housing policy in Shanghai. On 17 February 2012, Shanghai changed the definition of ordinary housing to include more housing in the property deed tax exemption, effective 1 March 2012. In contrast with the subsidy program rescinded in Wuhu, the policy in Shanghai encourages user demand while suppressing speculative demand through the use of purchase limits. Looking ahead. With more policy relaxation to come, transaction volumes will slowly recover, in our view. Even so, purchase limits are likely to remain in place and we believe volumes will stay at relatively low levels throughout 1Q12. Prefer low-risk players with growth potential. The current market is beginning to show more signs of a recovery. Transaction volumes, however, remain low. In this environment we prefer stocks with low risk and solid growth potential. CR Land (1109 HK, Outperform) falls into this category due to its large market capitalization and healthy launching schedule in 2012. China developer ratings and target prices Company Stock code Share price (HK$) Rating* Target price Upside (HK$) Agile 3383 HK 9.92 N 8.60 (13.3) CC Land 1224 HK 1.93 O 2.01 4.0 COLI 688 HK 16.06 N 14.73 (8.3) Country Garden 2007 HK 3.61 O 3.96 9.8 CR Land 1109 HK 15.00 O 16.14 7.6 Glorious 845 HK 1.45 N 1.21 (16.9) Greentown 3900 HK 5.38 U 2.97 (44.8) KWG 1813 HK 4.15 O 4.10 (1.1) Minmetals Land 230 HK 1.06 N 0.80 (24.5) R&F 2777 HK 9.48 U 4.23 (55.4) Renhe 1387 HK 0.92 O 1.02 10.9 Shimao 813 HK 9.63 N 6.55 (32.0) Sino-Ocean Land 3377 HK 4.45 U 2.46 (44.8) Shui On Land 272 HK 3.00 N 2.24 (25.4) * CCBIS ratings: O = Outperform; N = Neutral; U = Underperform Closing price on 20 February 2012 Source: Bloomberg, CCBIS estimates Five-week moving average of sales volume in residential properties GFA sold (10k sqm) 30 26 22 18 14 10 6 Dec-09 Apr-10 Aug-10 Nov-10 Mar-11 Jul-11 Oct-11 Feb-12 Source: China Real Estate database Low volumes maintained. Throughout the week, China property continued to recover, with a 45.0% WoW increase in volume. Nevertheless, volume remained at a low level, in line with our expectation as outlined in the previous issue of our Weekly Property Sales Flash (6-12 February 2012). Edmond Chan (852) 2532 6123 edmondc@ccbintl.com (%) Please read the analyst certification and other important disclosures on last page

Weekly China property sales data Average weekly transaction (sm) 1Q11 2Q11 3Q11 4Q11 Dec 2011 Jan 2012 2-8 January 2012 WoW (%) Policies Bohai Rim Beijing 121,271 105,677 102,100 99,908 99,360 32,025 52,600 34.5 Purchase limits Tianjin 202,200 160,515 192,742 127,900 101,160 39,000 85,500 30.9 Purchase limits YRD region* Shanghai 275,721 255,962 257,554 228,354 256,140 143,700 168,100 (24.9) Purchase limits, Property tax Nanjing 98,157 63,192 73,223 85,308 85,860 50,550 104,500 63.3 Purchase limits Hangzhou 103,600 95,238 90,885 86,562 93,520 39,900 70,000 213.9 Purchase limits Suzhou 93,893 86,123 138,177 150,577 168,840 90,150 184,300 59.3 Purchase limits PRD region** Guangzhou 165,079 177,046 155,446 141,038 139,080 70,550 113,800 16.7 Purchase limits Shenzhen 59,829 53,708 51,654 47,031 61,480 28,400 37,400 14.4 Purchase limits Western Chongqing 299,693 279,138 234,708 385,562 436,100 166,475 345,500 9.9 Property tax Chengdu 265,193 154,423 173,954 191,519 174,640 106,200 175,000 32.2 Average 161,618 76,695 129,844 45.0 * YRD region = Yangtze River Delta region ** PRD region = Pearl River Delta region Source: China Real Estate database 2

Policy impact on the China property sector Policies Purchase limits Property tax Possible impact May reduce property demand May negatively affect sentiment of potential buyers Land bank exposure of our coverage Exposure in cities in terms of GFA (%) Company Beijing Tianjin Shanghai Nanjing Hangzhou Suzhou Guangzhou Shenzhen Chongqing Chengdu Total Agile 2.2 1.3 3.2 14.6 1.2 3.2 25.6 CC Land 71.4 18.2 89.6 COLI 2.0 2.3 2.2 3.1 4.3 5.2 0.7 2.2 12.0 5.3 39.4 Country Garden 2.3 5.0 7.3 CR Land 3.4 3.3 3.2 1.1 2.6 6.8 10.0 30.2 Glorious 8.1 13.5 14.2 3.4 0.1 39.3 Greentown 1.6 0.5 3.3 3.7 15.0 3.7 27.8 KWG 5.0 9.0 4.0 10.0 48.0 21.0 97.0 Minmetals 4.7 18.3 23.0 R&F 6.8 9.9 2.9 10.7 26.8 9.9 66.8 Renhe 1.9 0.7 2.5 1.5 6.6 Shimao 0.5 2.2 2.5 6.8 4.5 1.1 4.7 4.6 26.9 Shui On Land 24.6 23.7 48.2 Sino Ocean Land 13.7 14.9 2.8 3.8 2.5 1.1 38.7 Source: Company, CCBIS estimates 3

Sales volume of residential properties in China (WoW) Sales volume of residential properties in China (YoY) k sm 350 300 250 214% 240% 200% 160% k sm 350 300 250 79% 100% 80% 60% 40% 200 120% 200 20% 150 100 50 63% 59% 35% 32% 31% 17% 14% 10% (25)% 80% 40% 0% 150 100 50 8% (22)% (38)% (46)% (47)% (47)% (48)% (52)% (67)% 0% (20)% (40)% (60)% 0 (40)% 0 (80)% Hangzhou Nanjing Suzhou Beijing Chengdu Tianjin Guangzhou Shenzhen Chongqing Shanghai The week before (LHS) This week (LHS) WoW (RHS) Suzhou Chongqing Nanjing Guangzhou Shenzhen Shanghai Chengdu Hangzhou Tianjin Beijing Average YTD 2011 (LHS) This week (LHS) YoY (RHS) Source: China Real Estate database 4

China property sector ratings and valuations Net gearing Current Target as at 1H11 FY10A FY11F FY11F Market NAV Target Stock cap Price NAV discount price Upside NAV discount Land unless bank otherwise Net profit (RMB m) 2012F 2012F 2012F contracted contracted contracted PER PBV yield sales sales sales target % Data Company code (US$m) (HK$) (HK$) (%) Rating # (HK$) (%) (%) (m sm) stated (%) Currency FY11F FY12F FY13F (x) (x) (%) (RMB b) (RMB b) (RMB b) achieved up to Footprint Agile 3383 HK 4,413 9.92 15.65 (36.6) N 8.60 (13.3) (45.0) 32.1 60.2 RMB 5,016 5,397 6,496 5.4 1.1 5.5 31.5 31.5 37.0 85.2 Dec National CC Land 1224 HK 633 1.93 3.65 (47.1) O 2.01 4.0 (45.0) 11.1 Net cash HK$ 535 855 1,269 5.8 0.4 4.7 6.4 0.1 7.5 1.3 Jan Western COLI 688 HK 16,927 16.06 18.41 (12.8) N 14.73 (8.3) (20.0) 36.2 38.5 HK$ 12,511 15,317 18,506 8.6 1.7 2.3 73.2 3.3 77.0 4.3 Jan National Country Garden 2007 HK 7,775 3.61 4.96 (27.2) O 3.96 9.8 (20.0) 52.0 66.5 RMB 5,817 6,913 8,140 7.3 1.5 5.1 43.2 43.2 43.0 100.5 Dec National CR Land 1109 HK 11,272 15.00 20.17 (25.6) O 16.14 7.6 (20.0) 26.1 73.3 HK$ 5,429 6,809 8,484 11.1 1.4 2.7 36.0 36.0 30.0 119.9 Dec National Glorious 845 HK 1,457 1.45 3.01 (51.9) N 1.21 (16.9) (60.0) 19.6 69.6 RMB 2,353 2,874 3,627 3.3 0.5 4.5 13.3 13.3 15.0 88.8 Dec National Greentown 3900 HK 1,138 5.38 7.42 (27.5) U 2.97 (44.8) (60.0) 40.7 267.0 RMB 2,122 2,791 3,245 2.7 0.5 9.3 35.3 1.6 40.0 4.0 Jan YRD KWG 1813 HK 1,548 4.15 10.26 (59.6) O 4.10 (1.1) (60.0) 8.8 60.7 RMB 1,954 2,353 2,862 4.3 0.7 4.7 10.9 10.9 15.0 72.7 Nov Southern Minmetals Land 230 HK 456 1.06 2.00 (47.0) N 0.80 (24.5) (60.0) 4.0 12.4 HK$ 791 1,003 1,295 2.9 0.4 3.4 3.0 3.0 4.05 74.2 Sep National R&F 2777 HK 3,940 9.48 8.45 12.2 U 4.23 (55.4) (50.0) 25.4 89.1 RMB 4,903 5,374 6,431 4.8 1.0 8.4 30.0 30.0 32.0 93.9 Dec National Renhe 1387 HK 2,509 0.92 3.40 (72.9) O 1.02 10.9 (70.0) 5.1 24.5 RMB 3,896 4,999 6,772 3.3 0.9 12.1 0.26 0.3 0.5 57.3 Jul National Shimao 813 HK 4,305 9.63 10.08 (4.5) N 6.55 (32.0) (35.0) 38.1 89.0 RMB 4,407 4,789 5,999 6.0 0.9 5.0 30.7 0.9 36.0 2.5 Jan National Sino-Ocean Land 3377 HK 3,249 4.45 3.78 17.7 U 2.46 (44.8) (35.0) 23.8 47.0 RMB 2,385 3,081 4,040 6.9 0.6 4.8 27.0 27.0 30.0 90.0 Dec Bohai rim Shui On Land 272 HK 2,016 3.00 4.07 (26.2) N 2.24 (25.4) (45.0) 10.9 65.0 RMB 1,539 1,881 3,071 6.2 0.4 5.7 10.7 10.7 10.0 107.0 Dec National Coverage average (29.2) (16.7) (45) 5.6 0.9 5.6 # CCBIS ratings: O = Outperform; N = Neutral; U = Underperform Closing price on 20 February 2012 CCBI HK/China Property Team Rose Zhang, (86755) 8826 6502, rosez@ccbintl.com Edmond Chan, (852) 2532 6123, edmondc@ccbintl.com Edison Bian, (86755) 8826 6503, edisonbian@ccbintl.com 5

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