Investment Rating - The report maintains an "Overweight" rating for the real estate development and real estate services sectors [6]. Core Insights - The industry is still in a bottoming and stabilizing phase, with a more optimistic view on real estate companies in core cities with abundant resources. The report highlights that while the marginal improvement in construction and sales is noted, housing prices still face downward pressure [1][2]. - The report recommends real estate stocks that align with the "good credit, good city, good product" logic, as well as leading property management companies with stable dividends and performance [1]. Summary by Sections Real Estate Development - In September, real estate development investment saw a year-on-year decline of 21%, which is a 1.8 percentage point increase in the decline compared to August. Cumulatively from January to September, the year-on-year decline is 14% [2]. - The land market showed marginal improvement in September, with transaction area and transaction amount down by 1% and 7% year-on-year, respectively, compared to declines of 25% and 31% in August [2]. - New construction in September decreased by 14% year-on-year, but the decline narrowed by 6 percentage points compared to August [2]. Sales Performance - The sales amount in September saw a year-on-year decline of 12%, which is a 2 percentage point narrowing from August. Cumulatively, from January to September, the year-on-year decline is 8% [3]. - The new housing price index in 70 cities decreased by 2.7% year-on-year in September, with a 0.3 percentage point narrowing from August [3]. Cash Flow Situation - In September, the cash inflow for real estate companies decreased by 12% year-on-year, although the decline narrowed by 0.4 percentage points compared to August. Specifically, deposits and prepayments fell by 9% year-on-year, while personal mortgage loans decreased by 11% [4]. - The overall cash flow situation for real estate companies remains to be improved, as domestic loans saw a significant decline of 15% year-on-year in September [4].

Investment Rating - The report assigns an "A" rating for buying the stocks of New Town Holdings (601155), Greentown China (03900), and China Jinmao (00817) with target prices of 18, 11.7, and 2.1 respectively [6]. Core Insights - The real estate market shows signs of stabilization with a year-on-year increase in transactions during the National Day holiday, marking the first positive growth since 2020. The total number of transactions in 30 major cities reached 4,304 units, up 1.7% year-on-year [1][13]. - There is a clear market differentiation, with first-tier and third-tier cities performing well, showing transaction increases of 18.3% and 24.0% respectively, while second-tier cities saw a decline of 25.9% [1][16]. - The report suggests a more optimistic outlook for the fourth quarter, driven by increased supply in core cities and recovering demand in non-core cities, indicating a potential sales growth [12][30]. Summary by Sections 1. National Day Holiday Market Performance - The real estate market during the 2025 National Day holiday showed a slight improvement compared to 2024, with 4,304 transactions recorded, the first year-on-year increase since 2020 [1][13]. - First-tier cities recorded 1,492 transactions, a growth of 18.3% from 2024, while third-tier cities saw 1,514 transactions, up 24.0%. In contrast, second-tier cities experienced a decline to 1,298 transactions, down 25.9% [16][19]. 2. High-frequency Data and Market Heat - High-frequency data has limitations in accurately reflecting the real estate market's heat due to statistical discrepancies and data quality issues. Daily transaction data tends to be lower during holidays [22][23]. - New housing supply and the number of viewings for second-hand homes provide better insights into market demand and developer sentiment. In September, the approved pre-sale area for new homes reached 705 million square meters, the highest monthly figure for 2025 [2][26]. 3. Outlook for the Fourth Quarter - The report anticipates a recovery in new home sales driven by strong land acquisition by leading developers and the introduction of quality projects in core cities. Non-core cities are expected to benefit from price adjustments and lower mortgage rates, enhancing rental yield advantages [3][30]. - Key companies to watch include those reversing difficulties like Gemdale Corporation and New Town Holdings, as well as leading firms maintaining land acquisition strength such as Greentown China and China Jinmao [3][12].

Investment Rating - The report maintains a "Positive" rating for the real estate and property management sectors [2][3]. Core Insights - The report highlights a narrowing decline in transaction volumes for both new and second-hand homes, with significant month-on-month increases in new home sales across major cities [3][4]. - The report emphasizes the impact of favorable policies, including low mortgage rates and city-specific initiatives aimed at urban renewal, which are expected to stimulate market activity [3][32]. - The report identifies potential investment opportunities in companies that are well-positioned to benefit from the evolving market dynamics, particularly in commercial real estate and property management [3][32]. Summary by Sections 1. Industry Data - New home sales in 34 key cities reached 2.604 million square meters, a week-on-week increase of 166%, with first and second-tier cities seeing a 170% increase [3][4]. - Year-on-year, new home sales in October are down 24%, with first and second-tier cities down 22% and third and fourth-tier cities down 43% [3][7][8]. - The inventory of unsold residential properties in 15 cities decreased by 0.2%, with a current available area of 90.1 million square meters [3][23]. 2. Policy and News Tracking - The People's Bank of China reported that the average mortgage rate for new loans was approximately 3.1% in September, down 25 basis points year-on-year [3][32]. - The Ministry of Natural Resources released 13 industry standards to guide urban renewal and the revitalization of underutilized spaces [3][32]. - Various cities have implemented tax incentives for rental housing enterprises and optimized public housing fund policies to support homebuyers [3][32]. 3. Company Performance - China Jinmao reported a 6% increase in sales volume to 3.675 million square meters and a 27.3% increase in sales revenue to 80.69 billion yuan for the first nine months [3][36]. - Other major developers like Poly Developments and China Vanke reported declines in sales volume and revenue, with Poly Developments seeing a 25.1% drop in sales volume [3][36]. - The report notes that several companies are actively engaging in financing activities, including issuing convertible bonds and providing loan guarantees [3][36].

Core Insights - The consumption market in China is experiencing a surge during the extended National Day and Mid-Autumn Festival holidays in 2025, with significant activity in both first-tier cities and county-level commercial complexes [1][2] - New City Holdings' (新城控股) Wuyue Plaza locations in Ruian, Zhejiang, and Xiaogan, Hubei, have become popular consumer destinations, showcasing the potential of county-level consumption [1][2] - The company's strategic focus on county-level markets and its operational capabilities are highlighted by the positive media coverage received [1][2] Financial Performance - New City Holdings reported a total commercial operating revenue of approximately 10.511 billion yuan for the first nine months of the year, reflecting a year-on-year growth of 10.82% [1][2] - The commercial sector has emerged as a crucial growth engine for New City Holdings amid a challenging real estate market [1][2] Cultural and Experiential Initiatives - Wuyue Plaza in Xiaogan has integrated local cultural elements, such as hosting large-scale interactive events centered around national-level cultural relics, which significantly boosted sales and foot traffic during the holiday period [2] - The company has successfully implemented innovative cultural and immersive experiences across multiple county-level Wuyue Plaza locations, enhancing consumer engagement and driving local economic activity [2]

Core Insights - The real estate market in September showed signs of stabilization and recovery, driven primarily by the demand for improved housing options [1][9] - A total of 24 real estate companies reported sales data, with 15 companies, accounting for 62.5%, experiencing a month-on-month increase in sales [1] - Differentiated pricing strategies have played a crucial role, with smaller units attracting buyers through competitive pricing, while improved housing options achieved premium pricing [1][9] Sales Performance - Among the 24 companies, Poly Developments and China Overseas Development led with sales exceeding 200 billion yuan in September, at 205.31 billion yuan and 201.73 billion yuan respectively [3] - Other notable companies include China Resources Land and China Merchants Shekou, with sales of 176 billion yuan and 166.98 billion yuan [3] - The sales growth for Poly Developments and China Overseas has been consistent, with both companies reporting month-on-month increases for three consecutive months [3] Market Dynamics - Different tiers of companies are experiencing varied recovery rates, with top-tier firms benefiting from scale advantages and mid-tier firms leveraging popular projects to boost sales [3][4] - Companies like R&F Properties saw a significant month-on-month increase of 132.31% in September due to a low sales base in August [4] - The overall market recovery is supported by strong land acquisition strategies focused on first- and second-tier cities, with a reported 13% year-on-year increase in land sales revenue across 300 cities [5] Land Acquisition Trends - Real estate companies are increasingly concentrating their land acquisitions in core cities, with top 20 cities accounting for 61% of the total land sales revenue [5] - China Resources Land acquired 18 new projects in the first half of 2025, with a total investment of 32.28 billion yuan, primarily in first- and second-tier cities [5] - The supply of quality land has increased, providing more options for developers, as seen in Beijing's recent addition of 22 new real estate projects [6] Product Quality and Market Appeal - The introduction of high-quality housing standards has enhanced market attractiveness, with improved housing options meeting the needs of buyers [7] - Recent policy adjustments in major cities have further stimulated demand, allowing for greater flexibility in purchasing [7] - The sales of improved housing options have surged, with a notable increase in the proportion of larger units sold in major cities [8][9]

Investment Rating - The report maintains an "Outperform" rating for the real estate industry [1]. Core Insights - The industry is transitioning into a stock era, with a focus on the renovation and enhancement of existing commercial properties, particularly in lower-tier markets where supply-demand dynamics are more favorable [6][60]. - The report highlights the successful case studies of CapitaLand and China Overseas Commercial REITs, which exemplify the full-cycle capital loop of acquisition, renovation, enhancement, and exit [3][14]. - The renovation of mature and acquired projects can significantly enhance their value, as demonstrated by the operational upgrades and tenant adjustments made by China Overseas since acquiring Nanhai Yifeng City [17][24]. - The report emphasizes the stability of rental income growth in lower-tier cities compared to first and second-tier cities, where competition is intensifying [3][60]. Summary by Sections Industry Transition - The new construction and completion of commercial properties have peaked, with the number of new shopping centers opening in 2024 expected to be the lowest in nearly a decade, indicating a shift from quantity growth to quality improvement [13][10]. - The proportion of reopened projects after renovation is increasing, with 21.79% of new openings in 2024 being renovated stock [13][9]. Case Studies - China Overseas Commercial REIT has shown a 22.82% compound annual growth rate in sales from 2020 to 2024, reflecting effective tenant adjustments and operational upgrades [17][24]. - CapitaLand's project in Changsha has maintained high operational efficiency, with a rental income growth of 13% post-renovation [40][44]. Market Dynamics - The report notes that lower-tier markets have a more favorable supply-demand balance, with less competition and stronger customer loyalty, leading to more stable operational expectations [3][60]. - The valuation of shopping centers in lower-tier cities is comparable to some second-tier cities, with examples like the Foshan project showing competitive pricing [69][70]. Investment Recommendations - The report suggests focusing on high-quality shopping center operators and related consumer infrastructure REITs, as they are expected to maintain high occupancy rates and stable sales [3][6]. - It highlights the potential for investment in companies like China Resources Land and New Town Holdings, which are well-positioned in the evolving market landscape [3][6].

Group 1 - A total of 22 stocks received "buy" ratings from brokerages on October 15, with 4 stocks announcing target prices [1] - Based on the highest target prices, New城控股, 小商品城, and 吉比特 ranked highest in target price increase potential, with increases of 45.27%, 42.78%, and 19.97% respectively [1] - Among the rated stocks, 18 maintained their ratings, while 4 received ratings for the first time [1] Group 2 - 小商品城 received the most attention from brokerages, with 4 firms providing ratings [1] - The sectors with the highest number of stocks receiving "buy" ratings include Commercial and Professional Services, Healthcare Equipment and Services, and Software and Services, with 5, 4, and 4 stocks respectively [1]

Core Insights - New City Holdings (601155.SH) reported stable and positive operational performance driven by its "residential + commercial" dual strategy as of September 2025 [1] Financial Performance - In September, New City Holdings achieved total commercial operating revenue of approximately 1.173 billion yuan, a year-on-year increase of 10.13% [1] - From January to September, the company accumulated total commercial operating revenue of approximately 10.511 billion yuan, reflecting a year-on-year growth of 10.82% [1] - Analysts suggest that the company is likely to exceed its annual target of 14 billion yuan in commercial operating revenue [1] - In terms of residential sales, the company recorded a contract sales amount of approximately 1.484 billion yuan in September, with a sales area of about 211,300 square meters [1] - For the first nine months, the cumulative contract sales amount reached approximately 15.050 billion yuan, with a total sales area of about 1,959,100 square meters [1] Financing Activities - New City Holdings has successfully achieved results in both domestic and international financing markets this year [1] - On September 23, the wholly-owned subsidiary New City Global issued $160 million in senior secured notes under the guarantee of New City Holdings and its parent company [1] - Earlier in June, New City Development issued $300 million in senior unsecured bonds, becoming the first private real estate enterprise to restart overseas capital market financing in nearly three years [1] - In August, the company successfully issued the first phase of medium-term notes for 2025 with a scale of 1 billion yuan, achieving a subscription multiple of 2.28 times and a coupon rate of only 2.68% [2] - On September 25, the company issued another medium-term note of 900 million yuan, both notes received full guarantee from China Bond and a dual AAA rating from China Chengxin International [2] - In the third quarter, the company repaid 1 billion yuan of public market bonds, maintaining a good record of early or on-time repayment of all debts [2]

Investment Rating - The investment rating for the real estate industry is "Positive" (maintained) [3][4] Core Viewpoints - The report emphasizes the importance of stabilizing the real estate market and stock market as a means to boost social expectations and facilitate domestic demand circulation. The focus is on high-quality housing and urban renewal, with a potential wave of development for high-quality residential properties [4][45] - The report suggests that the central government's consistent messaging since September 2024 has been to stabilize the real estate market, especially in light of external economic pressures [4][45] Market Performance - The Shanghai Composite Index rose by 0.4%, while the Shenzhen Component Index fell by 1.3%, and the ChiNext Index dropped by 3.9%. The real estate sector (Shenwan) decreased by 0.8% during the week [4][7] - In terms of individual stocks, Hefei Urban Construction saw a significant increase of 18.1%, while Shenzhen Real Estate A experienced a decline of 12.0% [4][7] Data Tracking New Housing Transactions - In the week of October 4-10, 2025, 42 key cities recorded a total new housing transaction volume of 980,000 square meters, a decrease of 51.0% from the previous week and a year-on-year decline of 53.5% [11][17] - For the month up to October 10, 2025, new housing transactions in these cities totaled 1.22 million square meters, down 44.8% month-on-month and 39.5% year-on-year [17] Second-Hand Housing Transactions - During the same week, 21 key cities recorded a total of 860,000 square meters in second-hand housing transactions, a decrease of 26.6% from the previous week and a year-on-year decline of 48.4% [29][35] - For the month up to October 10, 2025, second-hand housing transactions totaled 930,000 square meters, down 64.5% month-on-month and 29.3% year-on-year [35] Industry News - The Ministry of Housing and Urban-Rural Development is focusing on urban renewal and governance, with plans to upgrade old houses into "good houses" [45] - New regulations in Shenzhen limit the height of residential buildings to manage safety risks, while Chengdu has increased the area limit for balconies and other auxiliary spaces [45][46] Company Announcements - In September 2025, China Overseas Development reported a sales figure of 20.17 billion yuan, a year-on-year increase of 7.2%, while Poly Developments reported 20.53 billion yuan, a decrease of 1.8% [48] - New City Holdings issued a total of 160 million USD in unsecured fixed-rate bonds with a 2-year term and an interest rate of 11.88% [48]

Core Viewpoint - The investigation into the financial transactions between New城控股 and its subsidiary New城悦服务 has revealed significant amounts of related party transactions that were concealed from regulatory oversight and financial statements [1][3]. Group 1: Financial Transactions - New城控股 reported a total of 6.97 billion RMB in related party transactions, with 5.17 billion RMB occurring in the current period and 1.8 billion RMB in the previous period [1][6]. - The highest daily balance of related party transactions reached 700 million RMB in 2023 and 800 million RMB in 2024, with all transactions being repaid within the same month, except for one transaction in 2023 [2][6]. Group 2: Investigation Findings - An independent forensic investigation revealed discrepancies in the bank records and financial statements related to the transactions, indicating that they were not recorded properly [3][5]. - The investigation identified that a management employee, Yang Bo, orchestrated the related party transactions, bypassing internal approval processes by using custom paper approval forms [4][5]. Group 3: Management and Governance - Yang Bo was removed from his position as an executive director following the investigation, and a new member was appointed to the Environmental, Social, and Governance Committee to fill the vacancy [6][7]. - There is no evidence that Wang Zhenhua, the controlling shareholder, was involved in the related party transactions or aware of them during the investigation period [7][8].