Core Insights - The new housing market in Shenzhen shows a steady increase in transactions, with a notable rise in commercial properties, indicating growing interest in non-residential real estate [1][3] - The second-hand housing market recorded a nearly 10% increase in contract registrations, reflecting a subtle shift in supply and demand dynamics [4][6] - The market outlook remains stable, supported by favorable policies and an increase in new supply, although challenges such as declining seller willingness may impact future supply [9] New Housing Market - In the week of November 3-9, 2025, Shenzhen's new housing market recorded 1,015 transactions, a 2.2% increase from the previous week, maintaining a weekly transaction volume above 1,000 units [1] - The commercial property segment saw a significant surge, with transaction volume increasing by 66.8% compared to the previous week, highlighting a rising interest in non-residential properties [1] Supply Side - The fourth quarter is expected to see a supply peak in Shenzhen's new housing market, with over 10,000 new units anticipated, including high-demand projects in prime locations [3] Second-Hand Housing Market - The second-hand housing market recorded 1,452 contract registrations, a 9.5% increase week-on-week, indicating a high level of market activity [4] - The demand side shows a 4.6% increase in new buyer contracts, while the supply side experienced a 2.5% decrease in new seller contracts, suggesting a potential impact on future pricing trends [6] Regional Analysis - Longgang district continues to lead in transaction volume, with several areas making it to the top ten list, underscoring its significance in Shenzhen's real estate market [7] Market Outlook - The overall real estate market in Shenzhen remains stable, with new housing supply expected to rise and second-hand housing showing resilience [9] - Positive factors include ongoing financial support for reasonable housing demand and low mortgage rates, while challenges such as reduced seller willingness may limit second-hand supply [9]

Fixed Income Research - The issuance rates for credit bonds have decreased, with overall changes ranging from -10 BP to -3 BP during the period from November 3 to November 9 [2] - The issuance scale of credit bonds has increased on a month-on-month basis, with net financing amounts also rising, except for corporate bonds which showed negative net financing [2] - Secondary market transactions for credit bonds have decreased, while short-term financing bonds saw a slight increase in transaction amounts [2] - Credit spreads have generally narrowed, with most varieties at historical low levels; 1-year credit spreads are within 1%, 3-year and 5-year within 5%, and 7-year around 10% [2] Metal Industry Research - The steel industry is entering a consumption off-season, leading to increased pressure on steel prices; some steel mills are planning maintenance, which may reduce supply [6] - Copper prices are supported by tight supply due to overseas mining accidents, while the impact of U.S. government actions on economic data is being monitored [6] - Aluminum prices are expected to remain volatile due to low alumina prices and domestic demand shifting from strong to weak [6] - Gold prices are influenced by U.S. government actions and geopolitical factors, with long-term trends favoring gold due to central bank purchases and a weakening dollar [6] - Lithium prices are under pressure from production resumption expectations, but strong fundamentals may support prices [6] - Rare earth prices are expected to improve as demand increases with anticipated growth in neodymium-iron-boron production [6][7] Investment Strategy - In the steel sector, policies aimed at stabilizing growth are expected to improve industry profitability, with demand in shipbuilding and construction likely to increase [7] - The copper industry is expected to benefit from tightening global supply and improving demand from key sectors like electric power and new energy vehicles [7] - The aluminum sector is projected to see improved profitability due to strict capacity limits and demand growth from new energy vehicles [8] - Gold remains attractive in the long term due to macroeconomic factors and geopolitical tensions [8] - The rare earth sector is poised for reevaluation due to export controls and strategic importance, with ongoing demand from robotics and new energy sectors [8][9] - Cobalt supply is expected to be constrained, while demand from electric vehicles and energy storage will likely keep the market tight [9]

Investment Rating - The industry investment rating is "Overweight (Maintain)" [2][9] Core Viewpoints - The report indicates that the land market pressure remains significant in Q3 2025, with a year-on-year decline in land supply, transaction area, and land transfer revenue. Despite a decrease in land transfer revenue in first-tier cities, the premium rate has significantly increased. The average premium rate for land transfers in Q3 2025 is 4.56%, up by 0.81 percentage points compared to Q3 2024. The report suggests that the market is returning to rationality, with both supply and demand showing moderate declines [9][44]. Summary by Sections 1. National Land Supply and Transaction Situation in Q3 2025 - The planned land supply area in Q3 2025 is 760 million square meters, with a year-on-year growth rate of -9.42%. The total land transfer revenue is 0.68 trillion yuan, down by 9.74% year-on-year [12][19]. - The average premium rate for land transfers in Q3 2025 is 4.56%, with first-tier cities averaging 18.18%, second-tier cities at 2.60%, and third and fourth-tier cities at 3.02% [26][30]. 2. Analysis of High Total Price and High Premium Rate Land Parcels - High total price land parcels are primarily located in first-tier cities, with four parcels exceeding 5 billion yuan in total price in Q3 2025 [33][37]. - The number of cities with a premium rate exceeding 20% was 13 in July 2025, increasing to 19 in August, and then decreasing to 12 in September [40][42]. 3. Investment Recommendations - The report recommends focusing on leading real estate companies with stable performance and high safety, such as China Merchants Shekou, Binjiang Group, and China Vanke. Beneficiary stocks include Yuexiu Property, Greentown China, China Overseas Development, and China Resources Land. For the property sector, recommended companies include China Resources Mixc Life, China Overseas Property, Poly Property, China Merchants Jinling, and Greentown Service [9][44].

Core Insights - The real estate market in China is experiencing a downward trend in new home prices, with first-tier cities seeing a month-on-month decline of 0.3% and second-tier cities a decline of 0.4% in September [1][3] - The total sales area of new residential properties from January to September reached 65.835 million square meters, with a sales revenue of 630.40 billion yuan, both showing a year-on-year decline [1][7] - The overall expectation for new home sales revenue for the year is projected to be between 8.5 trillion and 9 trillion yuan, down from 9.68 trillion yuan last year [1] New Home Market - First-tier cities are showing a mixed performance, with Beijing and Shanghai experiencing slight increases in new home prices of 0.2% and 0.3%, while Guangzhou and Shenzhen saw declines of 0.6% and 1.0% respectively [3][4] - Second-tier cities also faced a decline, with notable increases in prices in cities like Hangzhou and Changchun, which rose by 0.3% and 0.1% respectively [3][4] Second-Hand Home Market - The second-hand home market is under pressure, with prices in 70 major cities showing no increases in September, and first-tier cities experiencing a month-on-month decline of 1.0% [5] - The average price decline in second and third-tier cities was 0.7% and 0.6% respectively, indicating a broader market trend [5] Inventory and Sales Dynamics - The total inventory of unsold residential properties decreased by 39.63 million square meters by the end of September, with residential inventory specifically down by 32.37 million square meters [7] - The sales area of new residential properties saw a year-on-year decline of 5.6%, while the sales revenue dropped by 7.6% [7][8] Construction and Investment Trends - Real estate development investment from January to September was 677.06 billion yuan, a year-on-year decrease of 13.9%, with residential investment down by 12.9% [7][8] - The area under construction decreased by 9.4%, with new construction area dropping by 18.9%, indicating a significant contraction in development activity [8]

Investment Rating - The industry rating is "Outperform the Market" [7] Core Viewpoints - The report emphasizes that the construction materials sector is expected to benefit from supply-side reforms and a potential turning point in the production capacity cycle. The easing of interest rates is likely to restore home-buying willingness, while policies related to urban renewal and storage will enhance purchasing power, increasing the probability of stabilization in the real estate market [3][5] - The report highlights that the real estate market has entered a bottoming phase after three consecutive years of decline in sales area, with heightened sensitivity to policy easing. The continuous negative growth in PPI for 35 months has led to a focus on reversing this trend, which is expected to benefit the construction materials sector [3][5] Summary by Sections Investment Recommendations - The report suggests focusing on three main investment lines: 1. High-quality companies benefiting from stock renovation, such as Weixing New Materials, Beixin Building Materials, and Tubao [5] 2. Undervalued stocks with long-term alpha attributes, such as Sankeshu, Dongfang Yuhong, and Jianlang Hardware [5] 3. Leading cyclical construction material companies with bottoming fundamentals, including Huaxin Cement, Conch Cement, China Jushi, and Qibin Group [5] Recent High-Frequency Data - As of October 17, 2025, the national average price of bulk P.O 42.5 cement is 343.2 CNY/ton, down 1.1% week-on-week and down 14.1% year-on-year. The average price of glass (5.00mm) is 1231.4 CNY/ton, down 2.7% week-on-week but up 5.8% year-on-year [4][20] Market Review - The report notes that the Shanghai Composite Index fell by 1.47%, and the Shenzhen Composite Index dropped by 4.34%. The construction materials index decreased by 4.11%, with sub-sectors such as refractory materials and fiberglass manufacturing experiencing declines of 9.42% and 10.78%, respectively [4][49][53]

Core Viewpoint - The real estate market is showing signs of stabilization and recovery, supported by various policies aimed at promoting housing demand and improving market conditions [1][2][3] Group 1: Market Performance - In the first eight months of the year, the sales area of new commercial housing decreased by 4.7% year-on-year, a reduction of 13.3 percentage points compared to the same period last year [1] - The sales revenue of commercial housing fell by 7.3%, with a decrease of 16.3 percentage points compared to the previous year [1] - The decline in new residential prices is narrowing, with first, second, and third-tier cities showing reductions of 0.2, 0.4, and 0.5 percentage points respectively in August [1] Group 2: Financial and Inventory Improvements - From January to August, the funds available to real estate developers decreased by 8%, but this decline is 12.2 percentage points less than the same period last year [2] - The inventory of commercial housing has been decreasing for six consecutive months, with a reduction of 3.17 million square meters from July to August [2] - The supply-demand balance in the real estate market is improving, with local governments reducing new land supply to prevent further imbalance [2] Group 3: Future Market Potential - Urbanization in China continues, with a housing stock of approximately 35 billion square meters, leading to an annual demand for about 700 million square meters of new construction [2] - There is a growing demand for "good houses," as urban development shifts from expansion to quality improvement, which will stimulate further demand [3] - The risk for real estate companies is gradually decreasing, with significant progress in debt restructuring for troubled firms, indicating a recovery in the industry [3]

Core Viewpoint - The Hong Kong real estate stocks continue to decline, with major companies experiencing significant drops, while some show slight gains. The overall market remains under pressure, and recovery will take time, although there may be a temporary increase in activity due to seasonal factors and favorable policies [1]. Group 1: Market Performance - Major Hong Kong real estate stocks such as China Overseas Land & Investment, Sunac China, and others have seen declines exceeding 6%, while some companies like Ronshine China have increased by nearly 5% [1]. - The latest statistics from the National Bureau of Statistics indicate that in August, new residential sales prices in first-tier cities fell by 0.1% month-on-month, with second-tier cities down 0.3% and third-tier cities down 0.4% [1]. Group 2: Price Trends - In August, second-hand residential prices in first-tier cities decreased by 1.0%, while second-tier cities saw a decline of 0.6% and third-tier cities a decrease of 0.5% [1]. - The decline in prices indicates ongoing downward pressure in the real estate market, necessitating a process for recovery [1]. Group 3: Future Outlook - Short-term prospects may improve with the release of favorable policies and the traditional peak sales season of "Golden September and Silver October" approaching [1]. - The real estate industry is expected to transition from a model characterized by "high debt, high leverage, and high turnover" to a focus on high-quality development, emphasizing product quality, operational service, and sustainable development [1].

Core Insights - The real estate market in China is showing signs of stabilization, with policies aimed at supporting housing demand and improving market conditions [1][3]. Group 1: Market Performance - In the first eight months of the year, the sales volume of new commercial housing decreased by 4.7% year-on-year, a reduction of 13.3 percentage points compared to the same period last year [3]. - The sales value of commercial housing fell by 7.3%, with a decrease of 16.3 percentage points compared to the previous year [3]. - Some first- and second-tier cities have experienced growth in both sales area and sales value of new commercial housing [3]. Group 2: Price Trends - The year-on-year decline in new residential prices has narrowed, with most cities showing reduced price drops in August [3]. - The price decline for new residential properties in first, second, and third-tier cities decreased by 0.2, 0.4, and 0.5 percentage points respectively compared to the previous month [3]. - The year-on-year decline in second and third-tier cities' second-hand residential prices also narrowed by 0.4 percentage points [3]. Group 3: Financial and Inventory Improvements - The funding and inventory situation for real estate companies has improved, with a steady progress in destocking [4]. - The funds available to real estate developers decreased by 8% year-on-year, but this decline is less severe than in previous years, with a reduction of 12.2 percentage points compared to last year [4]. - The inventory of unsold commercial housing decreased by 3.17 million square meters at the end of August, marking six consecutive months of reduction [4]. Group 4: Future Outlook - The real estate market is still facing challenges, and recovery will require ongoing efforts [4]. - The government emphasizes the need for high-quality urban renewal and the development of new models for real estate to better meet housing demands [4].

Investment Rating - The industry investment rating is maintained at "Outperform the Market - A" [7] Core Insights - The Shanghai land market is experiencing a resurgence, with the sixth batch of land auctions yielding a total of 28.957 billion yuan from 8 plots, indicating strong demand for core urban land [1] - The report suggests that under a backdrop of loose liquidity, the entry of core land in major cities is expected to restore market confidence and stabilize the real estate sector [1] - The report highlights potential investment opportunities in distressed real estate companies such as JinDi Group and New Town Holdings, as well as leading firms maintaining land acquisition intensity like China Merchants Shekou and Poly Developments [1] Sales Review (July 19-25) - A total of 13,042 units were sold across 32 monitored cities, representing an 18.5% week-on-week increase; however, cumulative sales for 2025 stand at 465,000 units, down 6.2% year-on-year [2][13] - First-tier cities sold 3,431 units, down 11.5% week-on-week, while second-tier cities saw a significant increase of 47% with 8,491 units sold [2][14] - The second-hand housing market also showed growth, with 23,343 units sold across 18 monitored cities, a 2.5% increase week-on-week, and a cumulative year-on-year increase of 10.4% [17] Land Supply (July 14-20) - The planned construction area for residential land supply across 100 cities is 4.8 million square meters, with a cumulative supply of 12.261 million square meters for 2025, reflecting an 11.7% year-on-year decline [3][21] - The average floor price for land supply across 100 cities is 5,376 yuan per square meter, with a 0.5% increase week-on-week and a 9.8% increase year-on-year [3][22] Land Transactions (July 14-20) - The total planned construction area for residential land transactions across 100 cities is 2.28 million square meters, with a cumulative total of 10.516 million square meters for 2025, showing a 5.1% year-on-year increase [4][43] - The average transaction floor price for residential land is 5,899 yuan per square meter, reflecting a 1.7% week-on-week increase and a 9.4% year-on-year increase, with an overall premium rate of 10.7% [4][45]

Core Viewpoint - The real estate market in China has shown signs of stabilization and recovery in the first half of the year, driven by policy support, demand structure adjustments, and industry transformation [1][2][3] Market Performance - New residential sales in key cities remained stable, with first-tier and strong second-tier cities experiencing year-on-year growth in sales area, such as Shenzhen and Guangzhou with increases of 24% and 17% respectively [2] - The second-hand housing market saw significant growth, with cities like Shenzhen reporting over 30% year-on-year increase in transaction volume [2][3] - Overall, the new residential prices in 100 cities increased by 1.16% in the first half of the year, with a 0.19% increase in June [2] Policy Measures - The government has implemented various "stabilize the real estate market" policies, focusing on stimulating demand, reducing inventory, and managing risks [5][6] - Over 340 policy measures were introduced across various regions, including adjustments to housing fund policies and increased subsidies for home purchases, particularly for families with multiple children [6][7] Land Market - The land market saw a 27.5% year-on-year increase in land transfer revenue, although the area of land sold decreased by 5.5% [4] New Development Models - The real estate sector is transitioning towards a new development model, emphasizing a "market + guarantee" housing supply system and high-quality housing construction [8][9] - The government aims to enhance the quality of housing, with new standards for "good houses" being established and implemented [9] Outlook for the Second Half - Industry experts anticipate that policies will continue to focus on stabilizing expectations, activating demand, optimizing supply, and mitigating risks, with ongoing differentiation in the market [10]