Market Performance - The Shanghai Composite Index rose by 3.8%, the Shenzhen Component Index increased by 4.4%, and the ChiNext Index went up by 3.9% this week [1] - The real estate sector (Shenwan) saw a rise of 5.1% [1] - The top five stocks by percentage increase were Chengjian Development (+34.5%), Yingxin Development (+22.0%), Shangshi Development (+20.8%), *ST Rongkong (+19.7%), and *ST Yangguang (+16.0%) [1] - The bottom five stocks by percentage decrease included Hainan Airport (-7.9%), Guangming Real Estate (-7.2%), Hezhan Energy (-5.5%), Shoukai Shares (-5.0%), and China Wuyi (-2.0%) [1] Real Estate Data Tracking - New homes: In the week of January 3-9, 42 key cities recorded a total transaction of 1.37 million square meters, a month-on-month decrease of 46.7% [1] - For January up to the week of January 9, new home transactions totaled 1.55 million square meters, down 30.1% month-on-month and 46.6% year-on-year [1] - Second-hand homes: In the week of January 3-9, 21 key cities saw a total transaction of 2.06 million square meters, a month-on-month increase of 25.4% [1] - For January up to the week of January 9, second-hand home transactions totaled 2.14 million square meters, down 16.1% month-on-month and 23.9% year-on-year [1] Industry News - The State Council, led by Premier Li Qiang, held a meeting to implement a package of fiscal and financial policies to boost domestic demand, including expanding the scope of public rental housing [2] - The central bank emphasized the continuation of a moderately loose monetary policy and the integration of incremental and stock policy effects [2] - Local policies include Shanghai's efforts to improve fair competition review mechanisms and Henan's support for local governments to issue special bonds for purchasing existing homes for affordable housing [2] - In Shenyang, the down payment for housing has been reduced to 15% until the end of 2026, while Chengdu extended its housing mutual assistance policy until the end of 2026 [2] Company Announcements - In December 2025, the sales figures for major real estate companies were as follows: Poly Development at 12.16 billion yuan (-18.9%), China Merchants Shekou at 25.84 billion yuan (-14.5%), and New Town Holdings at 1.35 billion yuan (-57.8%) [2] - China Overseas Development issued bonds with a 3-year term at an interest rate of 1.60%-2.60% and a 5-year term at 1.80%-2.80% [2] Personnel Changes - Vanke A's Yu Liang retired due to age, resigning from his positions as director and executive vice president [3] Investment Analysis - The real estate sector remains a crucial asset allocation and investment direction for Chinese households, with stable housing prices being significant for economic circulation [3] - The 20th Central Committee's emphasis on promoting high-quality development in real estate suggests potential policy support [3] - High-quality residential properties may see a development wave due to policy guidance and changes in supply-demand structure [3] - The Hong Kong private residential market sentiment is gradually recovering, indicating a potential revaluation for Hong Kong developers [3] - The sector is rated "positive," with recommended companies including China Resources Land, China Merchants Shekou, New Town Holdings, and others [3]

Core Viewpoint - The market is expected to gradually refocus on the consumer sector due to the recovery of high-end consumption and certain mass-market products, along with the implementation of national subsidy policies and funding demands for "high-cut low" strategies [1] Group 1: Market Trends - High-end consumption, including luxury goods and gambling, shows improvement in demand, while some mass consumer goods like beer and dairy products are experiencing governance and structural enhancements [3] - The long-term policy encouragement and low interest rate environment are expected to boost equity allocation dynamics, particularly in high-dividend, stable performance stocks with valuation advantages [1][2] Group 2: Investment Opportunities - Companies with strong global competitive power, particularly in the white goods sector, are enhancing their operational models and supply chains, which is expected to positively impact overall performance [2] - The selected consumer sector stocks have an average dividend yield of over 5% and a projected PE ratio of 13X for 2026, indicating potential for long-term investment [4]

Investment Rating - The report maintains an "Outperform" rating for the real estate industry [8] Core Insights - The real estate market is showing signs of stabilization, with policies expected to support recovery in 2026. The emphasis is on the financial attributes of real estate and its macroeconomic significance [17][19] - In December 2025, the top 100 real estate companies reported a sales decline of 23.8% year-on-year, with an annual decline of 15.9% for the entire year [16][17] - The report suggests focusing on three areas for investment opportunities: commercial real estate, second-hand brokerage, and property services, along with developers with strong product capabilities [19] Summary by Sections Sales Performance - In December 2025, the sales figures for the top 100 real estate companies showed a year-on-year decline of 23.8%, with cumulative sales for the year down 15.9% [16][17] - The top 10 companies had a sales decline of 13.1%, while the next tiers saw declines of 27.9% and 23.8% respectively [16] Market Trends - The report indicates that the new housing market is stabilizing, while the second-hand market is expected to see an increase in volume with stable prices [2] - The report highlights a significant drop in new and second-hand housing transaction areas, with declines of 21.18% and 21.75% year-on-year respectively [6] Policy Outlook - The report anticipates stronger policy support for the real estate market in 2026, aiming to boost market confidence and stabilize expectations [17][19] - The emphasis on "good housing" standards is expected to guide the industry towards quality improvement rather than mere expansion [4][18] Stock Market and Credit Bonds - The A-share real estate sector outperformed the market with a weekly increase of 5.07%, while the Hong Kong real estate sector rose by 3.04% [21][33] - The issuance of real estate credit bonds reached 6.38 billion yuan, with a net financing amount of 0.457 billion yuan [21][40] REITs Market - The REITs index increased by 1.74%, with the property REITs index rising by 2.27% [42][55] - The total transaction volume for REITs was 1.615 billion yuan, showing a significant increase compared to previous weeks [55]

Investment Rating - The report maintains an "Overweight" rating for the real estate sector [1] Core Insights - The real estate sector is experiencing a significant decline in sales, with a notable drop in both new and second-hand housing transactions across major cities [4][37] - Recent government policies, such as talent attraction initiatives in Nanjing and housing loan optimizations in Shenyang, aim to stimulate demand in the real estate market [6][13] - The overall market performance shows a rebound, with the Shenwan Real Estate Index increasing by 5.07%, outperforming the CSI 300 Index [3][11] Summary by Sections 1. Weekly Market Review - The Shenwan Real Estate Index rose by 5.07%, while the CSI 300 Index increased by 2.79%, indicating a relative outperformance of 2.29% [3][11] 2. Industry Fundamentals - For the week of January 2-8, the total number of new homes sold in 38 key cities was 19,373 units, reflecting a year-on-year decrease of 31.1% and a month-on-month decrease of 58.6% [4][21] - The total area sold was 178.5 million square meters, with a year-on-year decrease of 39.8% and a month-on-month decrease of 64.5% [4][21] - In the same week, the total number of second-hand homes sold in 16 key cities was 16,210 units, down 21% year-on-year and 6.9% month-on-month [37][40] 3. Land Market Supply and Transactions - During the week, land supply reached 2,258.2 million square meters, with a year-on-year increase of 25.3% [5] - However, land transactions fell sharply, with a total area of 2,488.6 million square meters sold, down 62.2% year-on-year [5] 4. Financing Analysis - Real estate companies issued a total of 3.53 billion yuan in credit bonds, marking a year-on-year decrease of 57.67% but a month-on-month increase of 411.59% [5] 5. Investment Recommendations - The report suggests focusing on financially stable leading real estate companies such as Poly Developments, China Merchants Shekou, and Yuexiu Property, which are expected to navigate market fluctuations effectively [6] - Property management companies like China Resources Mixc Life and Poly Property are also highlighted as potential beneficiaries of market recovery [6]

Summary of Key Points Core Viewpoint - As of January 9, a total of 73 stocks reached their 52-week highs, with notable performances from Lingxiong Technology (02436), Delai Construction (01546), and Zhipu (02513) showing significant growth rates of 104.99%, 38.89%, and 22.22% respectively [1]. 52-Week Highs - Lingxiong Technology (02436) closed at 11.760, with a peak price of 15.600, achieving a high rate of 104.99% [1]. - Delai Construction (01546) closed at 0.161, reaching a maximum of 0.250, with a high rate of 38.89% [1]. - Zhipu (02513) had a closing price of 158.600 and a peak of 165.000, resulting in a high rate of 22.22% [1]. - Other notable stocks include Asia Pacific Satellite (01045) with a high rate of 20.64% and Rongda Technology (09881) at 12.87% [1]. 52-Week Lows - The stocks reaching their 52-week lows include Lishi International (00842) with a closing price of 0.850, marking a decline of 39.29% [2]. - Bokan Vision Cloud - B (02592) closed at 2.930, with a decrease of 16.90% [2]. - Lingzai Technology Finance (00093) reached a low of 0.485, reflecting a drop of 14.77% [2].

Investment Rating - The report recommends a positive investment outlook for the real estate sector, highlighting specific stocks in various categories such as development, commercial residential, property management, and cultural tourism [1]. Core Insights - The report emphasizes the shift in the real estate industry from a focus on quantity to a focus on quality, driven by the new requirements set forth during the "15th Five-Year Plan" period, which aims for high-quality development [1][13]. - It identifies six key tasks to achieve high-quality development, including optimizing affordable housing supply and enhancing property service quality [1][61]. Summary by Sections 1. High-Quality Development as a New Requirement - The report discusses the significant changes in the real estate market, transitioning from a supply-demand imbalance to a potential oversupply situation, necessitating a focus on high-quality development [3][6]. - It outlines the central government's shift in policy from reducing leverage and total volume to stabilizing the real estate market and promoting quality [6][7]. 2. Understanding High-Quality Development - The report defines high-quality development as essential for meeting the people's aspirations for a better life, advancing modernization, and facilitating the transformation of the real estate industry [22][24]. - It presents three major significances, four key requirements, and six essential tasks for high-quality development [21][28]. 3. Policy Expectations for the 15th Five-Year Plan - The report anticipates that future policies will focus on risk prevention, quality improvement, and transformation in the development sector [62]. - It emphasizes the need for a balanced approach between short-term market stabilization and long-term structural reforms [36][60]. 4. Six Key Tasks for High-Quality Development - The report outlines six tasks: optimizing affordable housing supply, promoting sustainable market development, reforming development and financing systems, enhancing housing quality, improving property service quality, and establishing a safety management system for the entire lifecycle of housing [61][62].

Group 1 - The core viewpoint of the article is that Bank of America Securities is optimistic about the real estate market due to recent discussions in the "Qiushi" magazine, anticipating more proactive real estate policies, particularly mortgage subsidies, to be introduced in March and April [1] - Bank of America Securities favors companies with strong execution capabilities, such as China Resources Land, China Overseas Development, and Jianfa International Group [1] - China Resources Mixc Life is expected to benefit from any consumer stimulus measures [1] Group 2 - The rating for Wanwu Cloud has been upgraded to "Neutral" as the worst-case scenario seems to be reflected in the stock price [1] - The potential transfer of control to Shenzhen Metro is seen as a positive event-driven opportunity for Wanwu Cloud [1]

Core Viewpoint - UBS published a research report indicating that the article titled "Improving and Stabilizing Real Estate Market Expectations" in the Qiushi magazine highlights the crucial role of the real estate industry in China's economic development, which led to a significant rise in domestic property stocks by up to 7% on January 5th [1] Group 1: Industry Insights - The report emphasizes that the real estate sector plays a vital role in the economic landscape of China [1] - The content of the article does not present much new information but reaffirms the importance of the real estate industry, contrasting with market expectations following the recent Politburo meeting that suggested a decline in the sector's significance [1] - There is speculation that authorities may introduce policies to stabilize rental prices, aiming to narrow the gap between rental yields and mortgage rates, which could enhance market sentiment [1] Group 2: Market Predictions - UBS estimates that the authorities may lower the mortgage interest rate by 40 basis points this year [1] - In terms of stock selection, UBS favors companies with business model transformations, specifically China Resources Land, and those benefiting from the recovery of high-end shopping malls, such as China Resources Mixc Life, both receiving "buy" ratings [1]

Investment Rating - The investment rating for the real estate industry is "Positive" (maintained) [4] Core Views - The report emphasizes the importance of stabilizing real estate market expectations and highlights the sector's significant role in the national economy and as a source of household wealth [3][50] - The report suggests that the real estate market's healthy development is crucial for overall economic stability and calls for decisive policy measures rather than piecemeal approaches [50] Market Performance - The Shanghai Composite Index rose by 0.1%, while the Shenzhen Component Index fell by 0.6%, and the real estate sector (Shenwan) declined by 0.7% during the week [5][8] - Notable stock performances included Chengjian Development (+13.2%) and Sanzhong Impression (+10.7%), while Hualian Holdings (-15.5%) and Yatong Shares (-6.8%) saw significant declines [5][8] Data Tracking New Housing Transactions - In the week of December 27 to January 2, new housing transactions in 42 key cities totaled 2.56 million square meters, a 2.0% decrease from the previous week [16] - For December, new housing transactions reached 10.63 million square meters, a 35.7% increase month-on-month but a 40.5% decrease year-on-year [21] Second-Hand Housing Transactions - In the same week, second-hand housing transactions in 21 key cities totaled 1.64 million square meters, a 21.5% decrease from the previous week [34] - For December, second-hand housing transactions amounted to 9.22 million square meters, an 11.1% increase month-on-month but a 27.9% decrease year-on-year [37] Industry News - The Ministry of Housing and Urban-Rural Development aims for significant progress in housing quality improvement by 2030, focusing on standards, design, materials, and construction [50] - New tax policies were introduced, reducing the value-added tax rate for second-hand housing transactions to 3% for properties held for less than two years, while properties held for two years or more are exempt from VAT [50] - The China Securities Regulatory Commission announced the launch of a pilot program for commercial real estate investment trusts (REITs) to promote high-quality market development [50] Company Announcements - China Resources Land secured a sustainable development-linked loan of 2 billion yuan with a term of 36 months [54] - Huafa Group elected Guo Lingyong as the chairman of its board and Liu Yingzhe as vice chairman [54]

Investment Rating - The report maintains an "Outperform" rating for the real estate industry [8] Core Insights - The report emphasizes the financial attributes of real estate, highlighting its significant impact on the macro economy and the necessity for strong policy support from the central government [16][18] - It suggests that policies should be implemented in a decisive manner to stabilize market expectations, avoiding gradual measures that have proven ineffective [17] - The report anticipates a shift towards a new model of "affordable housing + quality housing + services," with an acceleration in the acquisition of existing properties to alleviate inventory pressure [18] Summary by Sections 1. Market Trends - The real estate market is expected to stabilize with policies that support both demand and supply, particularly in major cities where restrictions may be eased [16][18] - The report notes a significant decline in new and second-hand housing transaction volumes, with year-on-year decreases of 22.39% and 28.04% respectively [72] 2. Stock Market and Credit Bonds - The A-share real estate sector underperformed the market, with a weekly decline of 0.69%, trailing the broader market by 0.10 percentage points [21][22] - The issuance of real estate credit bonds totaled 1.514 billion yuan, with a net financing amount of -2.527 billion yuan [21] 3. REITs Market - The REITs index experienced a decline of 0.36%, with the property REITs index down 0.39% and the operating rights REITs index down 0.33% [41][54] - The total transaction volume for REITs was 0.551 billion yuan, reflecting a significant decrease of 59.30% compared to the previous period [56] 4. Land Market - The report indicates a decrease in land supply across major cities, with a 66.43% drop in supply and a 132.09% increase in transaction area, alongside a rise in premium rates [5] 5. Policy Outlook - The report outlines expectations for more robust housing policies in 2026, including the removal of restrictive measures and a focus on meeting diverse housing needs [18][19]