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Sanford Bernstein ran a Procensus investor survey to compile major talking points. ~100 investors participated, representing >$10T in AUM. Consensus suggests Airbnb delivers a +16% revenue CAGR in the next decade with steady state margins at ~25%. Bulls will argue the IPO price range (now indicating near ~$60) is reasonable. 15-20% revenue CAGR with 25% adj. EBITDA margins warrant a HSD sales multiple. Bears argue this is a stretch vs. key comps Booking and Expedia at ~4.5x and ~2x, respectively. Bernstein concern is that the company’s moat leads it to having a structurally lower margin profile vs. the OTAs. It incurs payment processing costs to facilitate the market for private rentals. That doesn't go away with scale.
Credit impulse driving most things, properties included...but note the 3 red lines having changed that relationship somewhat recently.
Nordea reminds us of:
"i) Liability-to-asset ratio (excluding advance receipts) of less than 70% ii) Net gearing ratio of less than 100% iii) Cash-to-short-term debt ratio of more than 1x If all three red lines are breached, a Real Estate developer is NOT allowed to grow the debt base at all (Evergrande has been stuck in this situation for a while)."
Numera simulates a 20% correction on property prices and reaches the conclusion:
"Our simulations reveal a 20% correction would lower global manufacturing and producer prices by around 2% one-year after the shock."
Guess we have to be China property experts for longer...