Shenwan Hongyuan Securities·2025-11-29 11:50Investment Rating - The report maintains an "Overweight" rating for the commercial real estate REITs sector, indicating a positive outlook for investment opportunities in this area [3]. Core Insights - The China Securities Regulatory Commission (CSRC) has initiated a pilot program for commercial real estate investment trusts (REITs), which is expected to significantly enhance the valuation of quality commercial assets [3]. - The potential market for public REITs in China is estimated to exceed 10 trillion yuan, with the current market size at 219.9 billion yuan, of which commercial real estate accounts for 130.9 billion yuan, indicating substantial growth potential [3]. - The pilot program aims to create a multi-tiered market for commercial real estate asset securitization, which will help in revitalizing existing assets, mitigating risks, and facilitating corporate transformation [3]. - The new model of real estate development emphasizes the operational management of existing assets rather than new construction, aligning with the broader economic goals of sustainable development [3]. Summary by Sections Pilot Program Overview - The CSRC has launched a pilot for commercial real estate REITs, which will include a wider range of underlying assets such as office buildings and hotels, thereby expanding the asset revitalization scope [3]. Market Potential - The global REIT market is characterized by a significant proportion of holding-type real estate and infrastructure assets, with market values approximately 60% and 40% respectively [3]. - The report highlights that the commercial real estate REITs pilot will complement existing infrastructure REITs, forming a complete public REITs market in China [3]. Strategic Implications - The introduction of commercial real estate REITs is seen as a critical step in transitioning the real estate sector from a developer-focused model to an asset management-oriented approach, which is essential for high-quality development [3]. - The report identifies two key opportunities: the favorable policy environment for quality housing and the strong performance of quality commercial enterprises during a period of monetary easing [3]. Investment Recommendations - The report recommends several companies for investment, including: - Commercial real estate: China Resources Land, New Town Holdings, Kerry Properties, Longfor Group, with a focus on Swire Properties and New Town Development [3]. - Quality housing companies: Jianfa International, Binjiang Group, China Jinmao, and Greentown China [3]. - Undervalued companies: Jianfa Shares, China Merchants Shekou, Yuexiu Property, China Overseas Development, and Poly Developments [3]. - Property management: China Resources Vientiane, Greentown Services, China Merchants Jinling, Poly Property, and China Overseas Property [3]. - Second-hand housing intermediaries: Beike-W, with attention to I Love My Home [3].