Core Viewpoint - The current real estate cycle is entering a "deep water zone," with a more optimistic outlook for core cities, particularly first-tier cities, in terms of recovery pace [1] Industry Analysis - The risk within the real estate chain sector appears to have been largely digested, and high-quality companies are expected to benefit from improved performance expectations and the dual logic of leading firms advancing [1] - The implied cost of equity for real estate chain companies has returned to a reasonable range compared to Q1 2025, indicating that investors have overly accounted for real estate cycle risks, leading to a reduction in valuation repair resistance [1] - The current real estate cycle downturn has been prolonged, influenced by disruptions such as the pandemic and trade frictions, suggesting that companies with strong industry positions and ample cash flow are likely to benefit from performance recovery expectations and the dual logic of leading firms advancing once the real estate cycle stabilizes [1] - Since July, valuations in the real estate and real estate chain sectors remain relatively low compared to technology and advanced manufacturing sectors [1]

Core Viewpoint - The current real estate cycle is entering a "deep water zone," with a recovery rhythm expected in core cities represented by first-tier cities [1] Industry Summary - The risk in the real estate chain sector may have been sufficiently digested, and high-quality companies are likely to benefit from improved performance expectations and the dual logic of leading enterprises advancing [1] - The implied cost of equity for real estate chain companies has returned to a reasonable range compared to the first quarter of 2025, indicating that investors' excessive consideration of real estate cycle risks has improved [1] - The resistance to valuation recovery in the real estate and real estate chain sectors has weakened [1] Company Summary - The prolonged duration of the current real estate cycle decline has been accompanied by disruptions from the pandemic and trade frictions [1] - High-quality companies with advantageous positions in the industry chain and ample cash flow are expected to benefit from performance recovery expectations and the dual logic of leading enterprises advancing after the stabilization of the real estate cycle [1] - Compared to the technology and advanced manufacturing sectors, the valuations of the real estate and real estate chain sectors have remained relatively low since July [1]