HTSC·2026-01-22 02:30Investment Rating - The report maintains an "Overweight" rating for the real estate development and services sectors [7] Core Insights - The real estate market in 2025 showed signs of stabilization, with a reduction in the rate of decline in both supply and demand, although overall sales still decreased year-on-year [1][2] - Structural opportunities exist in core cities and certain second and third-tier cities, with some companies poised to strengthen their competitive advantages [1][50] - The report emphasizes the importance of housing prices as a key indicator for market stabilization, with a focus on observing signals of price stabilization [3][32] Summary by Sections New Homes - In 2025, the total sales area of new homes was 880 million square meters, a year-on-year decrease of 9%, but the decline was less severe than in 2024 [11] - The number of new homes sold in 60 sample cities fell by 16% year-on-year, a reduction of 5 percentage points compared to 2024 [2] - The inventory of new homes in 80 cities decreased by 5% year-on-year, but the de-stocking period extended to approximately 32 months, the highest level since 2010 [37] Second-Hand Homes - The second-hand home market showed resilience, with total transactions in 2025 reaching approximately 2.39 million units, a slight year-on-year decline of 0.8% [3][26] - The price index for second-hand homes in 70 cities fell by 6.1% year-on-year, but the decline was less than in 2024 [32] - The proportion of second-hand home transactions continued to rise, reaching 66% in 16 key cities, up from 43% in 2021 [31] Cities and Companies - Certain cities, such as Beijing, Shanghai, and Chengdu, showed improvements in both sales volume and prices, indicating potential recovery [4][46] - Leading real estate companies like China Jinmao and China State Construction maintained or increased their market share despite overall market challenges [4][46] Investment Recommendations - The report suggests focusing on "three good" real estate stocks characterized by good credit, good cities, and good products, such as China Overseas Development and China Resources Land [5][50] - Companies with strong operational capabilities that can manage cash flow during market adjustments are also highlighted as potential investment opportunities [5][50] - Local Hong Kong real estate firms are expected to benefit from market recovery, along with property management companies with stable cash flows and dividend advantages [5][50]