The pressure test for JPMorgan shows: developers ' ability to resist pressure becomes stronger

Shanting, after a cash-flow pressure test on China's main property developers, JPMorgan's China Property report, released on February 27, concluded that even if all local government measures were strictly enforced and implemented, the cash flow of Chinese developers would be enough to withstand bad market conditions in the coming months.　　In a stress test for 19 of China's major real estate developers, JPMorgan's basic scenario assumes that sales of developers remain only 10% per cent faster than the developer's own target of 15%. The report notes that housing restriction measures combined with higher mortgage rates could lead to a 40%~60% in sales of primary homes over the Four seasons of 2010 years. JPMorgan's view is that as the property market has tightened since last April, developers have been prepared for the whole.　　Most developers have a strong cash position, as they have already made strong sales in the past two months, from the open bond market to capital. JPMorgan also carried out rigorous testing of developers ' ability to resist pressure.　　If developers sell at zero growth, developers will still be able to make a cash-flow balance; If the developer's sales growth is 20%, the developer's cash level is still strong enough to cover the funding gap. In these respects, JPMorgan believes that major Chinese developers were generally feeling severe financial pressure compared to 2008, but they are in a different position than they were three years ago: Now that developers have ample access to external financing options, the 2011 Cash flow budget is no bigger than last year's.　　Today, real estate projects are bigger and more profitable. In terms of assets and liabilities, JPMorgan expects China's real estate industry to remain stable for 2011 years. Among them, Longhu real estate and Shimao property themselves said they might control the net debt rate, while the developers who still hold more cash on hand may continue to buy land. But overall, developers will still be cautious.