Group 1 - The core view is that the Hong Kong residential market is expected to bottom out in mid-2025, with a recovery anticipated to strengthen in 2026, extending to CBD offices and high-end retail sectors [1] - Residential prices in Hong Kong are projected to rise by 5% to 10% in 2026 and by an additional 5% in 2027 [1] - The valuation of the sector has normalized, leading to a moderate expected increase in prices, with an average target price increase of 8% reflecting stronger residential price outlook and a 50 basis points reduction in capitalization rates to 4.5% to 5.25% [1] Group 2 - The company is optimistic about the potential for profit rebound driven by market recovery over the next three years, particularly favoring "buy" ratings for Cheung Kong Property (01113), Swire Properties (01972), and Hang Lung Properties (00101) [1] - The company maintains a "underperform" rating for MTR Corporation (00066) due to low likelihood of significant dividend increases amid substantial capital expenditure plans [1] - Key stocks with potential catalysts in Q1 include Hang Lung Properties, which is expected to announce a new Singapore property fund and increase share buybacks by at least $200 million, and Kowloon Development (01997), which is projected to see a 7% dividend growth in FY2025 supported by declining HIBOR and rising excess rents [1][2] Group 3 - The company believes that profit rebound will be crucial for further revaluation of the sector, with Hang Chi Properties expected to be the only Hong Kong developer to record significant profit rebound in FY2026 [2] - Overall, Cheung Kong and Kerry Properties (00683) are expected to lead the profit rebound for developers from FY2025 to FY2028, with an average annual rebound exceeding 10% [2] - Swire Properties and Hang Lung Properties are anticipated to lead profit growth for owners during the same period [2]

Group 1 - The meeting between Guangzhou's Mayor Sun Zhiyang and Swire Properties' CEO, Pang Guobang, emphasizes the importance of collaboration for urban development and economic growth in Guangzhou [2] - Guangzhou is focusing on expanding domestic demand, enhancing consumption supply, and promoting high-quality urban renewal and village transformation, aiming to become a more livable and internationally recognized metropolis [2] - Swire Properties is recognized as a leading global commercial real estate company, aligning its development philosophy and core business with Guangzhou's urban functional positioning [2] Group 2 - The Mayor expressed hope for further strengthening cooperation with Swire Properties in areas such as commercial real estate development, urban renewal, and consumer experience cultivation [2] - Pang Guobang acknowledged the support from Guangzhou and expressed confidence in the city's future development potential, committing to enhance investment and introduce more quality international brands and unique experiential projects [2]

Investment Rating - The report maintains a "Recommendation" rating for the real estate sector [2] Core Insights - The real estate sector index increased by 5.1% in the second week of January 2026, ranking 11th among 31 primary industry sectors [8][10] - New housing transactions in 20 monitored cities saw a 37% year-on-year decrease, while the average daily transaction volume increased by 104% week-on-week [22][27] - The report highlights three main issues in the real estate market: declining new housing demand, unresolved inventory issues, and the negative impact of land finance on the economy [34][35] Summary by Sections Industry Basic Data - The total market capitalization of the real estate sector is approximately 12,626.37 billion [2] Policy News - In Shenyang, new policies were implemented to optimize housing fund loans, including extending the minimum down payment policy to December 31, 2026, and increasing the loan limit for new citizens and youth [18][19] - Shanghai emphasized creating a fair market competition environment through new regulations [18][19] Sales Data - In the second week, the average daily transaction volume for new homes in 20 cities was 21.8 million square meters, with total transactions of 153 million square meters [26][27] - The average daily transaction volume for second-hand homes in 11 cities was 30.3 million square meters, with total transactions of 212 million square meters [27][32] Financing - The report notes that most companies issuing bonds this week are local state-owned enterprises, with New Hope Real Estate issuing the largest amount of 8.8 billion [33] Investment Recommendations - The report suggests focusing on three areas to find alpha in the real estate market: precision in land acquisition for developers, stable assets like leading shopping centers, and leading real estate agencies [34][35]

Core Insights - The real estate industry is currently facing significant challenges, with a decline in GDP contribution from the real estate and construction sectors, dropping from 15% in 2019 to 12% in the first three quarters of 2025 [7] - The shift in housing demand from "having a house" to "having a good house" indicates a structural change in the market, with a projected annual housing demand of over 860 million square meters until 2035, primarily driven by improvement needs [7] - The report emphasizes the need for policy adjustments to address the ongoing market downturn, with potential policy directions including administrative, public fund, fiscal, urban renewal, and stock activation measures [7][9] Macro Perspective - The economy is undergoing a transformation, with a noticeable decline in the contribution of the real estate sector to GDP [7] - The population peaked in 2021 and has been declining, affecting housing demand dynamics, particularly among potential first-time buyers [7] - Employment and income expectations remain weak, impacting consumer willingness to purchase homes [7] Mid-Macro Perspective - Market transaction volumes and prices are continuously declining, with new home transactions in 100 cities down 15% year-on-year from January to November 2025 [7] - The frequency and effectiveness of local policy interventions have decreased, leading to rising inventory levels and prolonged de-stocking periods [7] - Real estate companies are experiencing significant financial strain, with funding levels dropping from 20.1 trillion yuan in 2021 to 10.8 trillion yuan in 2024 [7] Micro Perspective - Home prices in first-tier cities have seen significant declines, with second-hand home prices dropping over 35% from their peak [7] - The expectation of falling home prices is growing among residents, with 23.5% anticipating further declines as of Q3 2025 [7] - The market is witnessing a shift towards improvement-type housing, with larger units (over 120 square meters) gaining market share [7] Policy Space - Future policy adjustments are expected to focus on loosening purchase restrictions in major cities and enhancing public fund policies [9] - Fiscal measures may include subsidies for home loans and adjustments to tax policies related to property transactions [9] - Urban renewal initiatives are anticipated to expand, particularly in transforming urban villages [9] Opportunities in the Real Estate Sector - The commercial real estate sector is poised for growth by adapting to new consumer demands and creating innovative shopping experiences [9] - Residential developers focusing on core cities and high-demand housing types are likely to benefit from market shifts [9] - The report highlights the potential for real estate investment trusts (REITs) to expand, particularly in commercial properties, as the market matures [9] Investment Recommendations - The report suggests focusing on companies with strong fundamentals in core cities, such as China Resources Land and China Merchants Shekou [9] - Smaller, agile firms that have made significant sales and land acquisition strides since 2024 are also recommended for consideration [9] - Companies innovating in the commercial real estate space, such as China Resources Vientiane Life and Swire Properties, are highlighted as potential investment opportunities [9]

Key Insights - The rapid development of the green finance market has led to an increase in relevant information and data, with a focus on the latest trends and practices in green finance to provide decision-making references for stakeholders [1] Group 1: Digital Currency and Green Finance - The digital RMB app has launched a carbon-inclusive service to enhance the application of digital RMB in green finance, allowing users to accumulate carbon credits from their low-carbon behaviors and exchange them for digital RMB [3] - This initiative is seen as a significant step by the People's Bank of China to encourage public participation in green low-carbon actions, linking personal green behavior with monetary incentives [3] Group 2: Policy Optimization in Green Financing - Jiangsu Province has optimized the "Environmental Base Loan" policy to expand support, enhance interest subsidy effectiveness, and strengthen financing guarantees, including the removal of financing limits and an increase in interest subsidy rates from 1% to 1.5% [4][5] - The policy aims to simplify application processes and improve loan issuance efficiency, addressing funding challenges for industrial enterprises in emission reduction [5] Group 3: Carbon Market Performance - The national carbon market saw a maximum price of 83.00 CNY per ton last week, with a closing price increase of 1.78% compared to the previous week [6] - The total transaction volume for carbon emission allowances reached 4,688,068 tons, with a total transaction value of approximately 352 million CNY [7] Group 4: Green Financial Instruments - Gansu Province issued the first "green infrastructure + regional coordinated development" dual-dimension sustainable bond in China, with a scale of 2 billion CNY and a 3-year term, linking the interest rate to specific performance targets [8][9] - Swire Properties successfully issued a 5-year, 500 million USD green bond with a coupon rate of 4.25%, reflecting strong market demand with an oversubscription of over four times [10] - The proceeds from the bond will be used for sustainable building projects and refinancing existing green projects, enhancing transparency and responsibility in fund usage [10]

Group 1 - The top three stocks with net inflows are Yingfu Fund (02800) with 6.826 billion, Hang Seng China Enterprises (02828) with 2.151 billion, and Kuaishou-W (01024) with 1.553 billion [1] - The top three stocks with net outflows are Tencent Holdings (00700) with -0.920 billion, China Mobile (00941) with -0.365 billion, and China Hongqiao (01378) with -0.257 billion [1] - In terms of net inflow ratio, Jiangsu Ninghu Expressway (00177) leads with 68.66%, followed by COSCO Shipping Ports (01199) with 62.64%, and Beijing Enterprises Water Group (00371) with 62.27% [1] Group 2 - The top ten stocks by net inflow include Xiaomi Group-W (01810) with 1.020 billion and Southern Hang Seng Technology (03033) with 0.944 billion [2] - The top ten stocks by net outflow also include China People's Insurance Group (01339) with -0.255 billion and GCL-Poly Energy (03800) with -0.213 billion [2] - The net outflow ratio for China National Building Material (03323) is -48.46%, followed by Gao Xin Retail (06808) at -48.27% and Swire Properties (01972) at -47.79% [3]

Core Viewpoint - The article discusses the ongoing dissatisfaction among homeowners of the Century Qiantan Tianyu project in Shanghai regarding the quality and communication from the developer, highlighting a significant disconnect between the developers' perspective and the homeowners' expectations [2][3][4]. Group 1: Project Overview - The Century Qiantan Tianyu project is located in Shanghai's Qiantan International Business District, with an average price exceeding 10 million yuan per unit [3]. - The project consists of 384 units, with prices ranging from 12.164 million to 51.425 million yuan, and is expected to be delivered by the end of 2026 [5][8]. - The project is developed by Lujiazui Group and Swire Properties, and the construction has faced delays, particularly in the residential section [5][8]. Group 2: Homeowners' Concerns - Homeowners have expressed frustration over various issues, including elevator quality, decoration details, and public area design, leading to a prolonged rights protection campaign that began in August 2024 [5][12]. - There is a significant concern regarding the lack of transparency during the sales phase, as many homeowners did not see model units before purchasing [8][10]. - Homeowners discovered discrepancies in the promised elevator brand, which was marketed as "Mitsubishi" but turned out to be "Shanghai Mitsubishi," leading to further dissatisfaction [10][11]. Group 3: Communication and Resolution Efforts - The developer has initiated regular communication meetings to address homeowners' concerns, with representatives from various departments attending [12][18]. - Some homeowner demands have been met, such as clarifying the elevator brand, but significant disagreements remain regarding decoration materials and standards [13][14]. - The developer plans to start showcasing the public area designs in the second quarter of 2026, aiming to enhance transparency and communication with homeowners [5][18].

Core Viewpoint - Swire Properties announced the successful sale of 48 out of 60 residential units in the fourth batch of "Lujiazui Swire Source" on the first day, achieving a sales revenue of RMB 2.64 billion, which accounts for 83.1% of the total value of this batch of properties [1] Sales Performance - The sold units are located in two riverside towers, featuring spacious layouts of 240 square meters and 388 square meters [1] - The average selling price for this batch is approximately RMB 180,000 per square meter [1] - Cumulatively, the project has surpassed RMB 12.3 billion in sales, with 234 out of 250 launched units sold, resulting in a sales rate of 93.6% [1]

Core Insights - Swire Properties announced that 48 out of 60 residential units from the fourth batch of "Lujiazui Swire Source" were sold on the first day, achieving a sales revenue of RMB 2.64 billion, which accounts for 83.1% of the total value of this batch of properties [1] Sales Performance - The properties in this batch are located in two riverside towers, featuring spacious layouts of 240 square meters and 388 square meters [1] - The average selling price for this batch is approximately RMB 180,000 per square meter [1] - Cumulatively, the project has surpassed RMB 12.3 billion in sales, with 234 out of 250 units sold, resulting in a sales rate of 93.6% [1]

Core Viewpoint - Morgan Stanley has upgraded its industry outlook for Hong Kong's real estate to "attractive," expecting positive year-on-year growth in three segments: residential property prices, Central office rents, and retail sales for the first time since 2018 [1][2]. Residential Sector - The firm is most optimistic about the residential market, predicting that property prices, which have fallen by 30% since 2018, will bottom out by 2025 and rise by 10% in 2026, with further increases expected in 2027 [1]. - The removal of stamp duties for foreign and mainland buyers in February 2024 is anticipated to boost property purchases from mainland clients [1]. - The influx of mainland immigrants, which has doubled to 140,000 annually post-pandemic compared to 70,000 from 2012 to 2019, is contributing to positive population growth [1]. - A strong stock market performance, with the Hang Seng Index rising by 28% in 2025, has also improved market sentiment [1]. Office Sector - Despite high vacancy rates, the market is expected to recover, with Central office rents projected to increase by 3% this year due to rising demand for quality office properties from asset management firms, hedge funds, and wealth management institutions [2]. - Recent large transactions, pre-leasing activities, and increased trading volumes in the IPO market are seen as positive indicators for the office sector [2]. Retail Sector - Retail sales in Hong Kong are expected to grow by 3% year-on-year this year, driven primarily by an increase in visitor numbers [2]. - However, there are concerns regarding the ongoing rise in online retail sales and competition from lower-priced products and services in Shenzhen, which pose challenges to the retail market [2]. - The expansion of duty-free sales in mainland China is also viewed as a potential pressure point for Hong Kong's retail sector [2].