BEKE(US:BEKE) Tianfeng Securities·2025-04-13 14:41Investment Rating - Industry rating: Outperform the market (maintained rating) [4] Core Viewpoints - The report emphasizes the development opportunity for "domestic demand" and highlights the value of sector allocation. The government's work report for 2025 includes stabilizing the real estate market as a key requirement for economic and social development. There is a positive expectation for incremental policies, which are crucial for stabilizing domestic demand amid export fluctuations. The recent deep adjustment in the sector has improved the cost-effectiveness of allocations, with A-share Shenwan real estate PB at 0.7X and H-share domestic real estate PB at 0.47X, nearing historical lows [1][9]. Summary by Sections 1. Market Overview - New housing market transactions for the week totaled 201 million square meters, with a month-on-month decline of 0.90% and a decrease of 1.46 percentage points compared to the previous month. The cumulative inventory stands at 111.49 million square meters, with accelerated de-stocking in second and third-tier cities, while first-tier cities are slowing down [3][15]. - The second-hand housing market saw transactions of 207 million square meters, with a year-on-year increase of 19.70%, although this represents a decline of 19.38 percentage points from the previous month [3][24]. - The land market recorded a transaction area of 2.628 million square meters, with a rolling 12-week year-on-year decline of 15.78% [3][29]. 2. Financing Dynamics - As of April 10, 2025, approximately 850 projects for acquiring idle land using special bonds have been announced nationwide, covering over 40 million square meters and totaling 128.2 billion yuan. The majority of these projects are led by local state-owned enterprises [2][11]. 3. Investment Recommendations - The report suggests focusing on non-state-owned enterprises benefiting from debt resolution, policy relief, and demand improvement. It also highlights leading real estate companies with product advantages and regional enterprises with improved market share. Additionally, it recommends second-hand intermediaries benefiting from increased transaction activity [4][10]. - Specific companies to watch include: 1. Non-state-owned enterprises: Longfor Group, Gemdale Corporation, New Town Holdings, Greentown China, and Binjiang Group 2. Local state-owned enterprises: Yuexiu Property, Urban Construction Development, and Jianfa International Group 3. Leading state-owned enterprises: China Overseas Land & Investment, China Merchants Shekou, Poly Developments, and China Resources Land 4. Quality property management firms: China Overseas Property, Poly Property, China Resources Mixc Life, Wanwu Cloud, and China Merchants Jinling [4][10].