Full-Year Results in Line on Strong Margin, Growth Trend Tapering Off

Poly Developments and Holdings Group released full-year results with revenue and earnings of CNY 236 billion and CNY 27.9 billion. The earnings were slightly better than the preliminary results announced in January, up nearly 50% year on year. Relative to our initial projection, full-year results ended with top line 11% below, but earnings were in line, on the account of much improved margin for the year. Full-year dividend was CNY 0.82 per share, up 64% from a year ago. As of year-end, the company has over 600 projects with a land bank of 211 million square meters, slowing from the strong expansion in operational scale seen during the past two years. As a result, the balance sheet strengthened substantially. We expect the company to enter a period of slower growth ahead. We maintain our fair value estimate of CNY 16, along with our no-moat rating for the company. The shares currently appear fairly valued.