Core Insights - Goldman Sachs predicts that the current decline in China's real estate market, which began in 2021, has only completed 40% of its total expected drop, with an additional 60% decline anticipated before reaching the bottom by the end of 2027 [5][6][18] Market Analysis - The report evaluates the current state of the Chinese real estate market by comparing it to historical global real estate crashes, forecasting a potential further decline of 10% in property prices [6][9] - Since the peak in Q4 2021, Chinese property prices have already dropped by 20%, and the market is expected to follow a typical crash pattern, indicating a prolonged downturn [6][14] Supply and Demand Dynamics - The current oversupply in the housing market is significant, with a reported 750 million square meters of unsold residential properties, suggesting that it could take two to three years to digest the existing inventory [7][9] - The demographic shift indicates a decrease in the primary home-buying age group (25-39 years), with a projected reduction of 42 million individuals by 2027, leading to diminished demand [7][9] Financial Strain on Consumers - The household debt-to-GDP ratio has reached 63.5%, comparable to developed nations, with housing affordability becoming a critical issue, particularly in major cities like Beijing and Shanghai where the price-to-income ratio exceeds 12 times [7][9] Policy Response and Market Stability - Despite numerous government measures aimed at stabilizing the housing market, such as lowering down payment ratios and interest rates, the fundamental issues of population decline, high inventory, and elevated debt levels remain unresolved [9][11] - The government's approach has shifted from attempting to boost prices to merely preventing a rapid decline, indicating a more cautious stance in policy implementation [9][11] Regional Variations - Different cities are experiencing varying degrees of impact, with first-tier cities expected to stabilize by late 2025 after a cumulative drop of up to 20%, while second-tier cities may see declines of up to 25% [14][16] - In contrast, third and fourth-tier cities are facing severe challenges, with potential price drops of 40% or more, making recovery to 2021 peak prices unlikely [14][16] Future Outlook - The real estate sector is anticipated to see a more pronounced recovery by 2026, contingent upon successful debt restructuring and improved market confidence [6][9] - Investors are expected to reassess valuations post-debt resolution and inventory clearance, with a gradual normalization of credit conditions benefiting leading private developers [6][9]

Core Viewpoint - The phenomenon of "shrinking cities" in China has gained attention as urbanization enters a new phase, characterized by population decline and economic restructuring, necessitating targeted development strategies and policy recommendations for sustainable urban development [1][48]. Group 1: Definition and Identification of Shrinking Cities - Shrinking cities are defined as urban areas experiencing sustained population loss and structural economic crises, requiring a multi-dimensional understanding [3][6]. - Identification standards for shrinking cities include a continuous decline in urban population over three years, economic growth below the national average, and mismatched urban expansion and population growth [7][10]. Group 2: Characteristics and Distribution of Shrinking Cities - There are 139 identified shrinking cities in China, with significant concentrations in the Northeast, particularly in Heilongjiang, where 12 out of 13 cities are classified as shrinking [10][11]. - Shrinking cities exhibit a paradox of spatial expansion despite population decline, with 93.03% of these cities still expanding their built-up areas [35][36]. Group 3: Causes of Shrinking Cities - Macro factors contributing to shrinking cities include population aging, low birth rates, and regional development imbalances, leading to resource and talent concentration in coastal areas [17][19]. - Micro factors include population outflow, a decline in job opportunities, and a stagnant real estate market, exacerbating the shrinking phenomenon [27][29]. Group 4: Transformation Paths for Shrinking Cities - Strategies for transformation include "smart shrinkage," focusing on quality and efficiency rather than mere expansion, optimizing urban space, and developing new industries [38][39]. - Specific development paths for resource-dependent cities involve leveraging local resources for new industries, while cultural tourism and ecological cities are emerging as viable options for others [40][41]. Group 5: Policy Responses - National policies emphasize the need for "smart shrinkage" strategies, optimizing administrative divisions, and avoiding blind expansion to enhance urban quality and competitiveness [43][44]. - Future policy recommendations include establishing monitoring mechanisms for shrinking cities, implementing differentiated support policies, and promoting regional collaboration for resource sharing [46][47].

Core Viewpoint - Baoxin Land (00299.HK) reported a significant decline in revenue due to the prolonged downturn in the Chinese real estate market, with a net loss recorded for the period [1] Financial Performance - The group's revenue for the six months ending June 30, 2025, was approximately HKD 57,377,000, representing a substantial decrease of about 87.4% compared to the same period last year [1] - The net loss for the current period was approximately HKD 241,770,000, a notable improvement from the net loss of approximately HKD 1,569,918,000 recorded in the same period last year [1]

Core Viewpoint - Baoxin Land (00299) reported a significant decline in revenue and a narrowed loss for the first half of 2025, primarily due to the prolonged downturn in the Chinese real estate market [1] Financial Performance - Revenue for the period was HKD 57.377 million, representing a year-on-year decrease of 87.39% [1] - The loss attributable to shareholders was approximately HKD 166.7 million, which is a year-on-year reduction of 86.22% [1] - Loss per share was HKD 0.15328 [1] Reasons for Performance - The substantial decrease in revenue was mainly attributed to the long-term slump in the Chinese real estate market [1] - The net loss was significantly impacted by inventory write-downs, leading to a gross loss of approximately HKD 7.169 million, which is a decrease of about HKD 107.6 million compared to the same period last year [1] - The group also faced a fair value loss of approximately HKD 56.413 million on investment properties during the period [1] - Additionally, there was a recognized impairment loss of approximately HKD 65.392 million related to prepayments for a land redevelopment project [1]

Core Viewpoint - The company has shown resilience in sales despite a challenging market, with a focus on inventory reduction and strategic land acquisition, while maintaining a stable financial position and financing channels [2][3][22]. Sales Performance - In the first half of 2025, the company achieved a contract sales amount of 122.2 billion, with a sales area of 5.35 million square meters, representing a year-on-year decrease of 3.4% and 9.5% respectively [2][4]. - The construction business recorded a sales amount of 41.9 billion, showing a year-on-year growth of 1.9%, contributing 34.3% to total sales [2][4]. - The sales target completion rate for self-invested projects reached 53.6%, indicating a strong cash flow with a collection rate of 96% [4][6]. Inventory Management - The company has made progress in inventory reduction, with 19 billion of inventory from 2021 and earlier being liquidated, resulting in a decrease in the proportion of completed unsold properties to 14.9% [6][8]. - The average liquidation rate for the first half of the year was 48%, with a target of 45% for the second half to meet the annual goal of 160 billion for self-invested projects [6][8]. Land Acquisition and Development - The company acquired 35 new land parcels with a total area of 3.55 million square meters, a year-on-year increase of 172%, with a new value of 90.7 billion [7][12]. - The land acquisition sales ratio increased to 0.67, indicating a significant increase in land acquisition efforts [7][10]. - The expected sales conversion rate for new projects in 2025 is 55%, which could contribute approximately 50 billion in sales [12][16]. Financial Performance - Total revenue for the first half of 2025 was 53.37 billion, a decrease of 23.3% year-on-year, with recognized revenue of 49.65 billion, down 22.1% [17][27]. - The comprehensive gross margin was 13.4%, a slight increase of 0.3 percentage points, while the net profit margin decreased by 2.5 percentage points to 2.3% [20][27]. - The company issued 7.711 billion in domestic bonds, with an average cost of 4%, and maintained a stable financial condition with a cash coverage ratio of 1.7 times for short-term debts [22][23].

Core Insights - The implementation of new regulations in South Korea is expected to drastically reduce offshore property purchases by foreigners to nearly zero in the coming year [1] - A global trend is emerging where many countries are tightening restrictions on foreign buyers, with notable examples including Australia, Spain, and Japan [1][7] - Conversely, some countries like New Zealand and Saudi Arabia are considering easing restrictions to attract foreign investment [9] Summary by Category Regulatory Changes - South Korea's new policy requires foreign buyers to obtain local government approval and mandates actual residency for at least two years after purchase [1][8] - Australia has banned foreign investors from purchasing completed residential properties until March 2027 [1] - Spain proposed a 100% property tax on non-EU buyers who do not reside in the country, effective from 2025 [7] Market Trends - The global real estate market is experiencing a downturn, with the U.S. housing market index falling to 32, indicating low builder confidence [4] - In the UK, average house prices have dropped for three consecutive months, with London experiencing a 2.6% decline in August [4] - New Zealand's property prices have decreased for four months, with a 0.2% drop in July [6] Regional Insights - In South Korea, all regions except for Seoul and its surrounding areas are expected to see a decline in property prices by mid-2025 [5] - The U.S. and other major markets are facing a decline in transaction volumes, with ongoing housing supply shortages expected to drive cross-border capital investment [6] Foreign Buyer Dynamics - The new regulations in South Korea are aimed at curbing speculative buying by non-resident foreigners, which is expected to benefit local buyers [8] - In Japan, rising property prices have led to political discussions about restricting foreign purchases, with proposals for an "empty house tax" to deter speculative investments [8] Investment Opportunities - Despite tightening regulations, there is an increase in inquiries from international buyers, particularly from Asia, indicating potential demand for properties in South Korea [10] - Saudi Arabia's new policy will allow foreign buyers to purchase property in designated areas starting January 2026, with significant investment incentives [9]

Core Viewpoint - The company, Baoxin Land (00299.HK), is expected to report a net loss of no more than HKD 245 million for the six months ending June 30, 2025, compared to a net loss of approximately HKD 1.57 billion in the same period of 2024, primarily due to the prolonged downturn in the Chinese real estate market [1] Summary by Relevant Categories Financial Performance - The anticipated net loss for the upcoming period is significantly lower than the previous year's loss, indicating a potential improvement in financial performance despite ongoing challenges in the market [1] - The company recorded a net loss of about HKD 1.57 billion in 2024, highlighting the severity of the financial impact from the market conditions [1] Market Conditions - The expected net loss is attributed to the long-term slump in the Chinese real estate market, which has led to a substantial decline in revenue [1] - The decline in fair value of investment properties is also a contributing factor to the anticipated losses [1] Impairment Losses - The company is facing impairment losses related to prepayments for a land redevelopment project and other deposits, which further exacerbates the financial challenges [1]

Group 1 - The company, Baoxin Land (00299), expects a net loss of no more than HKD 245 million for the six months ending June 30, 2025, compared to a net loss of approximately HKD 1.57 billion for the same period ending June 30, 2024 [1] - The anticipated net loss is primarily attributed to the prolonged downturn in the Chinese real estate market, resulting in a significant decline in revenue [1] - Additional factors contributing to the expected net loss include a decrease in the fair value of investment properties and impairment losses related to advance payments and deposits for a land redevelopment project during the period [1]

Core Viewpoint - The company, Baoxin Land (00299), anticipates a net loss of no more than HKD 245 million for the six months ending June 30, 2025, compared to a net loss of approximately HKD 1.57 billion for the same period ending June 30, 2024 [1] Group 1 - The expected net loss is primarily due to the prolonged downturn in the Chinese real estate market, leading to a significant decline in revenue [1] - The fair value of investment properties has decreased, contributing to the anticipated losses [1] - There are impairment losses related to prepayments and other deposits for a land redevelopment project during this period [1]

Core Viewpoint - The company reported a significant decline in revenue and a shift to a loss for the first half of 2025, primarily due to a downturn in the construction contracting business driven by a sluggish real estate market [1] Financial Performance - Revenue for the six months ending June 30, 2025, was 2.335 billion RMB, representing a year-on-year decrease of 39.1% [1] - The loss attributable to the parent company was 1.111 million RMB, compared to a profit of 14.83 million RMB in the same period last year [1] Business Segment Analysis - The decline in revenue was mainly due to a reduction of approximately 1.494 billion RMB in construction contracting business [1] - Revenue from residential, industrial, and public building contracting decreased by approximately 650.6 million RMB, 568.6 million RMB, and 239.3 million RMB, respectively, compared to the previous year [1] Strategic Focus - The company has increased resources and is focusing on high-value projects with good credit ratings to mitigate business risks [1]