Group 1 - The core viewpoint emphasizes the importance of quality improvement in urban development to stabilize the market and build confidence through good housing and pricing strategies [3][7]. - The report highlights the successful entry of state-owned enterprises in Quzhou, indicating a significant turnaround in business operations [3][7]. - The annual representative work focuses on innovative strategies while maintaining core values, suggesting a balance between tradition and innovation in the industry [3]. Group 2 - The report is part of a broader research framework aimed at understanding urban development and its implications for investment opportunities [6][7]. - The insights are derived from a detailed analysis of the urban work conference, which outlines the potential for asset updates and acquisitions in the sector [7].

Investment Rating - The industry investment rating is "Outperform the Market" and is maintained [1] Core Viewpoints - The real estate industry is currently in a state of overall surplus and structural shortage. According to the National Bureau of Statistics, from January to June 2025, the national commercial housing sales area decreased by 3.5% year-on-year, and sales revenue fell by 5.5%. In June alone, the sales area saw a year-on-year decline of 5.5%, with sales revenue dropping by 10.8%. The main reasons for this are high base figures and weak demand. However, the decline in construction starts and completions has narrowed, reflecting the progress of "guaranteeing delivery" and the recovery of land auctions in core cities. The number of fourth-generation residential units available for sale last year and expected to enter the market this year remains relatively low. The recent Central Urban Work Conference emphasized the shift from incremental expansion to stock quality improvement, focusing on "good houses + stock operation" for real estate companies [4][5]. Summary by Sections Industry Fundamentals Tracking - New housing transaction and inventory: In the last week, the new housing transaction area in 30 major cities was 1.2098 million square meters, with a cumulative transaction area of 50.4858 million square meters for the year, down 3.4% year-on-year. The average transaction area over the past four weeks was 1.8994 million square meters, down 16.9% year-on-year and 10.5% month-on-month. Among these, first-tier cities had an average transaction area of 550,400 square meters, down 16.9% year-on-year and 5.2% month-on-month [5][13]. - Second-hand housing transactions and listings: In the last week, the transaction area of second-hand houses in 20 cities was 201,990 square meters, with a cumulative transaction area of 63.9576 million square meters for the year, up 18% year-on-year. The average transaction area over the past four weeks was 209,680 square meters, down 8.8% year-on-year and 3.5% month-on-month [6][18]. - Land market transactions: In the last week, 100 major cities had 63 new residential land supplies and 16 transactions. The average transaction price for residential land was 7,059.75 yuan per square meter, with a premium rate of 14.19%, up 6.13 percentage points month-on-month [6][28]. Market Review - Last week, the A-share real estate index fell by 2.17%, while the CSI 300 index rose by 1.09%, indicating that the real estate index underperformed the CSI 300 by 3.26 percentage points. In the Hong Kong market, the Hang Seng Property Services and Management Index fell by 0.39%, while the Hang Seng Composite Index rose by 3.31%, showing a similar underperformance [7][32].