Ping An Securities·2025-12-14 13:49Investment Rating - Industry investment rating: Stronger than the market (maintained) [2] Core Viewpoints - The report emphasizes the necessity of lowering mortgage rates to enhance home buying attractiveness, with a focus on potential market stabilization in the second half of 2026 to 2027 [4] - The report highlights the importance of the upcoming annual report season in March and April 2026, where companies with strong inventory structure and product capabilities are expected to benefit [4] - The report expresses optimism regarding Hong Kong real estate investment opportunities in 2026, following the recent interest rate cuts by the Federal Reserve and the Hong Kong Monetary Authority [4] Summary by Sections Market Monitoring - New home transactions in 50 key cities reached 18,000 units, a week-on-week increase of 6.2%, while second-hand home transactions in 20 key cities also increased by 4.6% [11] - As of December 12, 2025, the inventory in 16 cities was 91.77 million square meters, with a slight week-on-week increase of 0.1% and a de-stocking cycle of 22.5 months [14] Capital Market Monitoring - The real estate sector saw a decline of 2.62% this week, underperforming the CSI 300 index, which fell by 0.08% [26] - The current PE ratio for the real estate sector is 59.07 times, significantly higher than the CSI 300's 13.91 times, indicating a valuation at the 94.33 percentile over the past five years [26] Key Company Insights - China Overseas Development is highlighted as a leading central enterprise with a low valuation of 0.34 times PB and a dividend yield of 4.3% [6] - China Resources Land is noted for its stable dividend policy, maintaining around 10 billion RMB in dividends from 2021 to 2024, with a current dividend yield of 5.1% [6] - Other companies such as Country Garden, Greentown China, and China Merchants Shekou are also recommended based on their strong operational capabilities and market positioning [6]