GUOTAI HAITONG SECURITIES·2025-06-19 11:10Investment Rating - The report assigns an "Overweight" rating to the real estate sector [1] Core Insights - The real estate market in May continued to show stability, aligning with the government's efforts to stabilize the market and prevent further declines [3][60] - Key indicators such as sales area and sales amount showed narrow fluctuations compared to April, with sales area declining by 4.6% year-on-year and sales amount decreasing by 7.1% [5][60] - The report anticipates that urban renewal will be a significant focus, with an emphasis on "building good houses" as a consensus in the industry [61][62] Summary by Sections 1. Industry Performance - In May, the real estate market maintained a steady state, with most data showing narrow fluctuations compared to April [5][60] - Year-on-year sales area decreased by 4.6%, while sales amount fell by 7.1% [5][60] - The report notes that the overall trend is expected to continue, with a focus on stabilizing the market [3][60] 2. Investment Trends - The cumulative real estate development investment from January to May 2025 was 36,234 billion yuan, a year-on-year decrease of 10.7% [12] - New construction area saw a year-on-year decline of 22.8%, while completed area decreased by 17.3% [18][26] - The report suggests that the focus should shift from year-on-year growth rates to absolute levels, with a projected total real estate development investment of 10 trillion yuan for 2024 [61][62] 3. Sales Performance - From January to May 2025, the total sales area of commercial housing was 35.3 million square meters, with a year-on-year decline of 2.9% [26][28] - The sales amount for commercial housing was 34,091 billion yuan, reflecting a year-on-year decrease of 3.8% [10][26] - The report highlights a mismatch in supply and demand in first-tier cities, with sales showing significant strength [33] 4. Funding Sources - Total funding sources for real estate reached 40,232 billion yuan from January to May 2025, down 5.3% year-on-year [45][47] - Domestic loans accounted for 16.6% of funding sources, with a year-on-year decrease of 1.7% [47][49] - The report indicates that self-raised funds decreased by 7.2%, while foreign investment saw a significant increase of 49% [47][56] 5. Investment Recommendations - The report recommends several companies for investment, including Vanke A, Poly Development, and China Overseas Development in the development category [62] - For commercial and residential sectors, companies like China Resources Land and Longfor Group are highlighted [62] - The report emphasizes that companies with lower burdens will have a more significant advantage in the current structural market [62]