野村對新城事件看法

大致結論是投資者信心恢復可能需要很長時間，但是相信“對近期基本面的影響有限”，例如現金流和日常營運。

以下原文。野村事件發生前的評級是買入，目標價12。

Fundamental impact: 

 Is it deemed as a “change of control triggering event” and prompt repurchase of USD bond? No. We have checked the bond circulars and the change of chairman is not deemed as change of control and will not trigger a USD bond repurchase. 

 A shares pledge margin call? We think it may not trigger a margin call. Future Land has pledged 51% of its A-share subsidiary (Seazen Holdings, 6011155 CH) holdings. The pledged A shares is 34% of outstanding A shares. The weighted average share price when pledging is RMB21.04/share is 51% lower than the current A-share price. The pledged loan amount of RMB4-5bn is only 13-16% of the current market cap of the pledged A shares. 

 Near-term cash flow pressure? We see limited near-term cash flow pressure. The bond repayment in the remainder of 2019 is only 13% of its cash balance in 2018. The total short-term debt (including bank borrowings) is 52% of the cash balance. 

 The new chairman, Mr. Wang XiaoSong, joined Seazen Holdings in 2009. He was appointed as President of Seazen Holdings in August 2018. We think the new chairman has enough experience to take over the position. 

Our take: 

We think the event could deeply damage the company’s corporate governance track record and it may take a long time to rebuild investors’ confidence. We are reviewing our target price. However, we believe the near-term fundamental impact is limited (e.g. cash flow and daily operations as we highlighted above). After a 24% share price plunge yesterday, the stock is trading at 5.4x FY19 P/E (mid-sized developers’ average 5.8x). We do not rule out longer-term negative impacts (e.g. potential weakening relationship with onshore banks and local governments), but we think it will take time to revaluate.