Investment Rating - The report indicates a cautious investment outlook for the real estate sector, suggesting a low allocation to real estate stocks while highlighting potential recovery opportunities in the third quarter [6]. Core Insights - The real estate market is experiencing a downturn, with A-share real estate stocks down by 2.2% and Hong Kong real estate stocks down by 0.4% during the week of July 12-18 [2]. - The land market shows a rising premium rate, with an average premium rate of 11% for residential land in 300 cities, despite a significant year-on-year decline in transaction volume [2][41]. - Sales of new homes in 47 cities totaled 253 million square meters, reflecting a 6% decrease week-on-week and a 9% decrease year-on-year, indicating a seasonal low [3][46]. - The report notes that some real estate companies are beginning to show signs of profit recovery, with 27 out of 73 companies forecasting positive net profits for the first half of 2025 [5][23]. Summary by Sections Market Performance - The A-share real estate sector ranked 30th among all sectors with a decline of 2.2%, while the Hong Kong real estate sector ranked 12th with a decline of 0.4% [2][27]. - The property service index in Hong Kong also saw a decline of 0.4%, underperforming compared to the Hang Seng China Enterprises Index, which increased by 3.4% [2][33]. Land Market - In the week of July 12-18, the total area of residential land sold in 300 cities was 450 million square meters, down 20% week-on-week and 49% year-on-year, with a cumulative area of 19,610 million square meters for the year, reflecting a 5% year-on-year decrease [2][41]. Sales Data - New home sales in June showed a slight month-on-month price decline of 0.3% and a year-on-year decline of 3.7%, indicating a stabilizing market despite ongoing price pressures [3][4]. - The second-hand housing market also reflected similar trends, with a 1% increase week-on-week but a 3% decrease year-on-year in transaction volume [3]. Company Performance - Among the 73 real estate companies that released performance forecasts, 27 expect positive net profits, while 46 anticipate losses. Notably, 6 companies are expected to report profit increases, including prominent firms like Binhai Group and Poly Development [5][23]. Investment Recommendations - The report suggests that the third quarter will be crucial for policy adjustments that could impact the real estate market's performance in the latter half of the year. It recommends investing in companies with strong product capabilities and those likely to benefit from favorable policies [6].