HTSC·2025-05-12 04:40Investment Rating - The report maintains an "Overweight" rating for the real estate development and service sectors [5]. Core Insights - The real estate market in China is experiencing a seasonal decline in activity, with new home registrations in 44 cities down by 26% week-on-week, and second-hand home registrations down by 15% [1]. - Despite the recent decline, year-to-date new home sales in 44 cities show a slight increase of 0.2% year-on-year, while second-hand home sales have surged by 28% [1]. - Inventory levels in 21 key cities have decreased by 0.6% week-on-week, indicating a gradual improvement in market conditions [1]. - The report highlights a positive outlook for companies with strong cash flow and performance, particularly in key urban markets, suggesting potential valuation recovery [3]. Summary by Sections Market Overview - The real estate market's activity has seen a seasonal dip, with new home registrations in 44 cities down 26% and second-hand home registrations down 15% week-on-week [1]. - Year-to-date, new home sales in 44 cities are up 0.2% year-on-year, while second-hand home sales have increased by 28% [1]. Inventory and Sales Dynamics - As of May 4, inventory in 21 key cities decreased by 0.6% week-on-week, with a year-on-year decline of 15% [29]. - The report notes that the de-stocking speed has improved, with a current pace of 80 weeks, which is 3 weeks faster than the previous period [29]. Recommended Companies - The report recommends several companies for investment, including: - Chengdu Investment Holdings (600649 CH) with a target price of 6.34 and a "Buy" rating [6]. - Chengjian Development (600266 CH) with a target price of 7.32 and a "Buy" rating [6]. - Binjiang Group (002244 CH) with a target price of 12.08 and a "Buy" rating [6]. - China Overseas Development (688 HK) with a target price of 17.07 and a "Buy" rating [6]. - China Resources Land (1109 HK) with a target price of 32.72 and a "Buy" rating [6]. - The report emphasizes the potential for valuation recovery for companies with solid cash flow and market presence [3].