Core Viewpoint - The 2026 "strong medicine" policy for the real estate market aims to address the industry's challenges and stabilize macroeconomic conditions, focusing on improving market expectations and promoting high-quality development after a prolonged adjustment period [1][3]. Group 1: Market Conditions - The real estate sector has faced significant declines since reaching peak levels in 2021, with real estate development investment dropping to 7.86 trillion yuan in the first eleven months of 2025, a decrease of over 40% from the peak [3]. - The sales area of commercial housing fell to 787 million square meters, a decline of over 50%, returning to levels seen in 2009 [3]. - The average price of second-hand homes in 30 major cities has decreased by 39% from historical peaks, reflecting ongoing low market confidence [3]. Group 2: Policy Measures - The "strong medicine" policy features a dual approach targeting both supply and demand, with significant measures aimed at reducing home purchase costs [5]. - Starting in 2026, the interest rate for existing housing provident fund loans will be reduced by 25 basis points, with the first-time homebuyer rate dropping to 2.6%, automatically effective without application [5]. - Local governments are also implementing measures such as increasing loan limits for families with multiple children and providing home purchase subsidies to lower barriers to homeownership [5]. Group 3: Market Response - The policy aims to reshape market expectations, with initial effects already visible, such as a 72.8% increase in property visits and a 37.4% rise in second-hand home viewings following the new policies in Beijing [8]. - The reaffirmation of real estate as a foundational industry for the national economy has corrected market perceptions and is expected to gradually restore market confidence [8]. Group 4: Future Outlook - The 2026 "strong medicine" policy is seen as a critical response to stabilize the market in the short term while aiming for long-term high-quality development [9]. - The policy window presents opportunities for rational home purchases, while the industry faces both risks and transformation opportunities [9]. - The market is expected to gradually achieve a balance between supply and demand, with a focus on risk control and quality improvement, supporting stable economic operations in the new five-year plan [9].

Core Viewpoint - The recent land auction in Nanjing indicates a strong demand for quality residential land in core areas, reflecting a recovery in market confidence and a shift towards improvement-oriented housing supply [1] Group 1: Auction Details - On December 19, Nanjing held a concentrated land auction with a total transaction value of 7.319 billion yuan [1] - The G90 plot in Hexi Central experienced intense competition, with 61 rounds of bidding, ultimately sold to Aoti Construction for 1.611 billion yuan, resulting in a floor price of 45,325 yuan per square meter and a premium rate of 26.35% [1] Group 2: Market Analysis - According to the analysis by the Nanjing branch of the China Index Academy, the auction reflects that high-quality residential land in core areas remains highly sought after, driven by improvement demand [1] - The participation of state-owned enterprises and the return of private enterprises indicate a restoration of market confidence [1] - An increase in low-density supply suggests that new housing in Nanjing will further tilt towards improvement-oriented offerings [1]

Core Insights - The fund issuance market in 2025 has shown remarkable performance, with a total issuance scale exceeding 1.06 trillion yuan as of November 28, marking a significant shift in market dynamics towards equity funds [1] - Equity funds (both stock and mixed types) have become the dominant force in the market, accounting for over 50% of the total issuance, surpassing bond funds for the first time in history [1] - The number of newly established funds reached 1,376, with a total issuance of 10,624.56 billion units, showing slight growth compared to the previous year [1] Fund Structure Changes - Equity funds accounted for 50.55% of the total issuance, with stock funds raising 390.04 billion units and mixed funds raising 147.07 billion units, contrasting sharply with the nearly 70% share of bond funds in the previous year [1] - Fund of Funds (FOF) products have also seen explosive growth, with 69 new funds established, raising a total of 73.55 billion units, approximately 5.5 times the amount raised in the same period last year [1] Market Performance in November - In November, 136 new funds were established, with a total issuance of 94.57 billion units, maintaining a strong momentum despite market volatility [2] - Active equity funds and FOF products performed particularly well, with notable funds like E Fund's Industrial Selection leading with an issuance of 3.16 billion units [2] Investor Behavior and Market Outlook - Analysts attribute the structural changes in the fund issuance market to macroeconomic conditions, market sentiment, and evolving investor preferences, indicating a restoration of market confidence [4] - The emergence of popular funds reflects a more mature and rational investor base, focusing on solid research capabilities and risk control rather than chasing trends [4] - The outlook remains optimistic, with expectations of continued growth in equity funds driven by the irreversible trend of wealth shifting towards capital markets and increased participation from long-term funds like pensions [4]

Core Viewpoint - The consensus reached during the China-US Kuala Lumpur economic and trade consultations is expected to stabilize trade relations, improve China's external circulation, and reduce market risk premiums [1][3]. Macro - The reduction and continued suspension of tariffs will help improve China-US trade and support Chinese exports. The US will cancel the 10% "fentanyl tariff" on Chinese goods and suspend the 24% equivalent tariff for one year, leading to a decrease in the overall effective tariff rate from 27% to 17% by 2025 [4][5]. - The expected increase in Chinese exports to the US could be around 10% due to the lowered tariff rate [4]. Export Controls - The US will suspend the implementation of the "50% penetration rule" for export controls for one year, which will benefit trade in key areas between China and the US. China will also relax certain export controls for rare earths and lithium battery materials for one year [6]. International Trade Costs - The suspension of port fees and related measures by both countries is expected to lower international trade costs and enhance shipping demand, particularly for agricultural products [7][19]. Agriculture - The consensus to expand agricultural trade is expected to accelerate trade in agricultural products, with projections indicating a slight decrease in China's soybean import share from the US in 2025 [7][20]. Technology - The outcomes of the consultations are favorable for the Chinese technology sector, particularly in terms of tariff reductions on electronic products and the suspension of certain export control measures, although restrictions on advanced technology access remain [25]. Commodities - The cancellation and delay of tariff barriers are expected to boost short-term demand for various commodities, including copper and aluminum, while also supporting the prices of precious metals like gold and silver [27][28]. Internet - The reduction in tariffs is expected to benefit cross-border e-commerce platforms, allowing them to maintain competitive pricing in the US market [31]. Textiles and Apparel - The easing of trade tensions may help stabilize the utilization rate of textile and apparel production capacity in China, benefiting companies that have not fully relocated their production [33]. Home Appliances - The reduction in tariff pressure is expected to provide direct benefits to the home appliance sector, improving the profitability of companies heavily reliant on exports to the US [36][37].

Group 1 - The core viewpoint is that despite challenges in the external environment, China's economy is stabilizing due to changes in policy, enterprises, and capital, leading to a recovery in market confidence [1] - Since September of last year, a series of incremental policies have been effectively implemented, enhancing market participants' understanding of policies and boosting social confidence [1] - Enterprises are focusing on internal improvements, innovation, international expansion, and business diversification, resulting in positive news for various industries and a breakthrough in the recognition of Chinese companies' innovation capabilities [1] Group 2 - Global sovereign funds and pension funds are increasingly aware of the uncertainties in U.S. policies, leading to a diversification of investments and a growing allocation towards RMB assets [1] - Domestic asset confidence is recovering, with funds previously concentrated in the bond market and fixed deposits becoming more active and shifting towards equity assets and higher liquidity [1] - To further enhance market confidence, deepening reforms, particularly in the social security system, is deemed crucial, with a focus on improving basic pensions for urban and rural residents to stimulate domestic demand [2]

Core Viewpoint - Country Garden (02007.HK) reported a significant financial performance in the first half of 2025, indicating a positive outlook for the company amidst ongoing restructuring efforts [1] Financial Performance - In the first half of 2025, Country Garden achieved revenue of approximately 72.57 billion yuan and total assets of about 909.33 billion yuan, exceeding total liabilities [1] - The net assets of Country Garden were reported at approximately 50.78 billion yuan [1] Debt Restructuring - As of August 18, over 77% of holders of existing public notes have joined the restructuring agreement, and a support agreement has been established with a committee representing 49% of the principal of a syndicated loan [1] - The company expects to complete the overall restructuring of its offshore debt within this year, which could lead to a significant deleveraging, reducing debt by over 11 billion USD and extending maturity periods up to 11.5 years [1] - The restructuring is anticipated to significantly lower financing costs and optimize the debt structure, providing Country Garden with the necessary adjustment space to navigate the current industry downturn [1] Market Confidence - On August 22, Country Garden was included in the Hang Seng Composite Index, marking a milestone in meeting the Hong Kong Stock Connect eligibility criteria and signaling a positive recovery in market confidence and liquidity [1]

Core Insights - The land market has seen a resurgence in activity this year, with real estate companies focusing on core cities and private real estate firms actively participating in land auctions [1][2] Group 1: Market Activity - Since May, several private real estate companies have successfully acquired land in cities like Guangzhou, Chengdu, Changsha, and Fuzhou [2] - From January to May 2025, the top 100 real estate companies in China acquired a total of 405.19 billion yuan in land, marking a year-on-year increase of 28.8%, with the growth rate expanding by 2.2 percentage points compared to the previous month [2] Group 2: Private Firms' Participation - Notable private firms such as Hangzhou Binjiang Real Estate Group and Sichuan Bangtai Investment Group have made significant land acquisitions, with Binjiang Group ranking among the top ten in land acquisition amounts [2][4] - The return of private firms to the land auction market indicates a recovery in market confidence and expectations for future market conditions, supported by government policies aimed at stabilizing the market [2][4] Group 3: Strategic Focus - Private real estate firms are concentrating on familiar core cities and increasing their land reserves, with Binjiang Group leading in land acquisition in Hangzhou [4] - Many participating private firms are in a stable operational condition, showing investment willingness and financial capability, while some smaller regional firms are seizing opportunities during market adjustments [4] Group 4: Future Outlook - Increased policy support and improved market sales performance are expected to enhance financing support for private firms, further boosting their land acquisition activities [4] - The return of private firms to the land auction market is anticipated to help restore expectations in the land market and improve local land fiscal forecasts, contributing to a healthier competitive landscape in the industry [4]

Group 1 - The A-share market experienced a low opening followed by upward fluctuations, with sectors such as beauty care, electronics, media, and retail performing well [1] - As of May 21, 394 listed companies announced repurchase and increase plans since Q2 2025, a growth of over 60% compared to 246 companies in Q1 [1] - The net reduction in industrial capital decreased to 5.975 billion from 6.799 billion, indicating a recovery in investor confidence [1] Group 2 - The A500 ETF (512050) is positioned to help investors easily access core A-share assets, tracking the CSI A500 Index with a balanced industry allocation and leading company selection strategy [2] - The ETF combines value and growth attributes, suggesting long-term investment potential [2]

Core Viewpoint - The external geopolitical environment in early March is characterized by increased disturbances, but this does not alter the recovery of market confidence. Despite recent external disruptions, market participants are expected to tolerate these disturbances as risk appetite gradually improves. The focus of Trump's policies remains on domestic issues and non-China countries rather than on the US-China rivalry, suggesting that external disturbances will not significantly impact the recovery of market confidence [1][2][4]. Geopolitical Environment Analysis - The frequency of external disturbances from Trump has increased, including the signing of the "America First Investment Policy" memorandum and a 10% increase in tariffs on China. However, the market's tolerance for these disturbances is expected to rise as risk appetite improves. The upcoming conclusions from the "America First Trade Policy" memorandum on April 1 will be crucial for understanding the future of US-China economic relations [2][3][4]. Key External Events - Six important external events are highlighted: Trump's congressional speech, the "America First Investment Policy" memorandum, new tariffs on China, the national "Two Sessions" policy deployment, negotiations surrounding the Russia-Ukraine conflict, and European elections. Trump's speech focused on economic, immigration, tariffs, and foreign policy, but provided limited new information [4][5][6]. Trade Policy Insights - The "America First Investment Policy" memorandum is not legally binding and primarily expresses a stance rather than indicating substantial changes in US-China investment policies. It aims to strengthen scrutiny of US investments in China, but its priority is considered limited due to ongoing debates within US policy circles [5][6]. Tariff Implications - The new tariffs on China are framed under the guise of border security, reflecting domestic issues rather than a broader economic confrontation. The cumulative impact of the 20% tariffs imposed on China is estimated to reduce China's quarterly exports and GDP by 3.3 and 0.36 percentage points, respectively, but the overall impact is deemed manageable [5][6]. Domestic Policy Response - The national "Two Sessions" have prepared for external pressures, emphasizing proactive macroeconomic policies. The government aims to implement a combination of fiscal and monetary policies to effectively respond to external challenges, while also promoting high-quality initiatives like the Belt and Road Initiative [6][7]. European Political Landscape - The recent German federal election results indicate a shift towards a center-right government, which may influence European economic and asset dynamics positively. The political and diplomatic factors affecting the Eurozone are expected to stabilize in the short term [7].

Investment Rating - The report indicates a positive outlook for the real estate industry, particularly in the second-hand housing market, with signs of recovery and price stabilization in key cities [6][17]. Core Insights - The second-hand housing prices have stopped declining and are stabilizing, with over 60% of high-end communities in core cities experiencing price increases [5][6]. - In January 2025, 49.48% of monitored second-hand housing communities saw price increases month-on-month, marking a 1.18 percentage point rise from the previous month [6][7]. - The average bargaining space in typical cities has narrowed to 18.1%, indicating a trend where transaction prices are increasingly aligning with listing prices, reflecting stronger seller confidence [13][15]. - The demand for improved and high-end properties is driving price increases, with 58.04% of improved communities and 65.85% of high-end communities reporting price rises in January [15][17]. - The "old-for-new" policy is enhancing the second-hand market's recovery, facilitating smoother transactions and contributing to a broader market stabilization [18]. Summary by Sections Second-hand Housing Market Performance - The second-hand housing market is showing signs of recovery, with a notable increase in transaction volumes and price stabilization in major cities [6][9]. - In January, cities like Suzhou and Xi'an reported over 50% of communities with rising prices, with Suzhou reaching 84.51% [9][10]. Price Trends and Seller Confidence - The proportion of communities with rising listing prices has increased to 42.28%, reflecting a growing seller confidence [7][10]. - The average bargaining space has decreased, with some cities like Nanjing and Suzhou seeing transaction prices exceed listing prices, indicating a competitive market for quality properties [13][15]. Market Segmentation - Improved communities are leading in price increases, while high-end properties are also rebounding significantly, with a notable absence of bargaining space in some cases [15][16]. - The market is showing differentiated recovery, with stable pricing in the first-time buyer segment but greater volatility in high-end properties [17][18].