Investment Rating - The industry investment rating is maintained at "Outperform the Market - A" [7] Core Insights - The Shanghai land market is experiencing a resurgence, with the sixth batch of land auctions yielding a total of 28.957 billion yuan from 8 plots, indicating strong demand for core urban land [1] - The report suggests that under a backdrop of loose liquidity, the entry of core land in major cities is expected to restore market confidence and stabilize the real estate sector [1] - The report highlights potential investment opportunities in distressed real estate companies such as JinDi Group and New Town Holdings, as well as leading firms maintaining land acquisition intensity like China Merchants Shekou and Poly Developments [1] Sales Review (July 19-25) - A total of 13,042 units were sold across 32 monitored cities, representing an 18.5% week-on-week increase; however, cumulative sales for 2025 stand at 465,000 units, down 6.2% year-on-year [2][13] - First-tier cities sold 3,431 units, down 11.5% week-on-week, while second-tier cities saw a significant increase of 47% with 8,491 units sold [2][14] - The second-hand housing market also showed growth, with 23,343 units sold across 18 monitored cities, a 2.5% increase week-on-week, and a cumulative year-on-year increase of 10.4% [17] Land Supply (July 14-20) - The planned construction area for residential land supply across 100 cities is 4.8 million square meters, with a cumulative supply of 12.261 million square meters for 2025, reflecting an 11.7% year-on-year decline [3][21] - The average floor price for land supply across 100 cities is 5,376 yuan per square meter, with a 0.5% increase week-on-week and a 9.8% increase year-on-year [3][22] Land Transactions (July 14-20) - The total planned construction area for residential land transactions across 100 cities is 2.28 million square meters, with a cumulative total of 10.516 million square meters for 2025, showing a 5.1% year-on-year increase [4][43] - The average transaction floor price for residential land is 5,899 yuan per square meter, reflecting a 1.7% week-on-week increase and a 9.4% year-on-year increase, with an overall premium rate of 10.7% [4][45]

Core Viewpoint - The real estate market in China has shown signs of stabilization and recovery in the first half of the year, driven by policy support, demand structure adjustments, and industry transformation [1][2][3] Market Performance - New residential sales in key cities remained stable, with first-tier and strong second-tier cities experiencing year-on-year growth in sales area, such as Shenzhen and Guangzhou with increases of 24% and 17% respectively [2] - The second-hand housing market saw significant growth, with cities like Shenzhen reporting over 30% year-on-year increase in transaction volume [2][3] - Overall, the new residential prices in 100 cities increased by 1.16% in the first half of the year, with a 0.19% increase in June [2] Policy Measures - The government has implemented various "stabilize the real estate market" policies, focusing on stimulating demand, reducing inventory, and managing risks [5][6] - Over 340 policy measures were introduced across various regions, including adjustments to housing fund policies and increased subsidies for home purchases, particularly for families with multiple children [6][7] Land Market - The land market saw a 27.5% year-on-year increase in land transfer revenue, although the area of land sold decreased by 5.5% [4] New Development Models - The real estate sector is transitioning towards a new development model, emphasizing a "market + guarantee" housing supply system and high-quality housing construction [8][9] - The government aims to enhance the quality of housing, with new standards for "good houses" being established and implemented [9] Outlook for the Second Half - Industry experts anticipate that policies will continue to focus on stabilizing expectations, activating demand, optimizing supply, and mitigating risks, with ongoing differentiation in the market [10]

Core Viewpoint - The real estate market in China is experiencing mixed trends, with some cities seeing price increases while others face declines, particularly in first-tier cities. The overall market shows signs of recovery, but challenges remain. Group 1: Price Trends - In June, new home prices in Shanghai and Changsha increased by 0.4% month-on-month, while prices in Ningbo and Zhanjiang rose by 0.3% [1] - First-tier cities saw a month-on-month decline of 0.3% in new home prices, with Shanghai being an exception with a 0.4% increase [3] - Year-on-year, Shanghai's new home prices rose by 6%, leading the 70 cities, while Beijing, Guangzhou, and Shenzhen experienced declines of 4.1%, 5.1%, and 2.5% respectively [3] Group 2: Second-hand Housing Market - In June, second-hand home prices in first-tier cities fell by 0.7% month-on-month, with Beijing, Shanghai, Guangzhou, and Shenzhen seeing declines of 1.0%, 0.7%, 0.7%, and 0.5% respectively [5] - Only Xining saw a month-on-month increase in second-hand home prices, with a rise of 0.1% [6] Group 3: Market Activity and Investment - From January to June, national real estate development investment totaled 46,658 billion yuan, a year-on-year decrease of 11.2% [9] - The sales area of new commercial housing decreased by 3.5% year-on-year, with residential sales area down by 3.7% [9] - The construction area of real estate projects fell by 9.1% year-on-year, indicating a slowdown in new developments [10] Group 4: Future Outlook - Analysts expect a rebound in market activity in the second half of the year, particularly after July, as government policies are implemented to stimulate the market [8] - Core cities are optimizing real estate policies to better meet housing demands, which may stabilize the new home market [10]

Group 1 - The overall domestic real estate market in 2025 is showing a stable trend, with recovery efforts yielding some success due to supportive policies from the previous year [1] - The sales revenue of the top 100 real estate companies in the first half of 2025 reached 1.84 trillion yuan, a year-on-year decrease of 11.8%, with a notable decline in June [2] - The top 10 real estate companies are primarily state-owned enterprises, with Poly Developments, Greentown China, and China Overseas Land & Investment leading in sales [2] Group 2 - In June 2025, the overall housing market continued to stabilize, with new home transaction volumes in 30 key cities reaching 1.034 million square meters, remaining flat compared to the same period last year [3] - The top 100 real estate companies achieved a monthly sales amount of 338.96 billion yuan in June, with nearly 60% of these companies experiencing month-on-month growth [3] - The land acquisition total for the top 100 companies in the first half of 2025 was 506.55 billion yuan, reflecting a year-on-year increase of 33.3% [4] Group 3 - The competition for prime land in core cities has intensified, leading to a significant increase in land transfer fees across 300 cities, although the transaction area has decreased [4] - Central state-owned enterprises dominate land acquisitions, accounting for 58% of the total in 22 cities, while local state-owned enterprises' share has declined [5] - The average premium rate for land transactions in 300 cities has decreased to 4.4% as of June 25, 2025, indicating a cooling in the land market [5]

Report Industry Investment Rating - No relevant content provided Core Viewpoints - For soda ash, supply remains ample with production decline and profit drop, and it's expected that supply will stay loose, demand will contract, and prices will continue to face pressure. The basis of soda ash starts to revert, and basis reversion trading may continue. It is recommended to short the main soda ash contract on rallies [2]. - For glass, the supply slightly decreases with one more cold - repaired production line, and the industry profit keeps falling. The demand is expected to weaken further due to the poor real - estate situation. It is suggested to go long on dips in the short - term and short on rallies in the medium - to long - term [2]. Summary by Directory Futures Market - The closing price of the main soda ash contract is 1181 yuan/ton, down 15 yuan; the closing price of the main glass contract is 1006 yuan/ton, down 13 yuan. The price difference between soda ash and glass is 175 yuan/ton, down 2 yuan. The 9 - 1 contract spread of soda ash is - 13 yuan, down 17 yuan; that of glass is - 79 yuan, down 21 yuan. The basis of soda ash is 14 yuan, down 11 yuan; that of glass is 37 yuan, down 3 yuan [2]. - The open interest of the main soda ash contract is 1,588,831 lots, an increase of 79,343 lots; that of the main glass contract is 1,470,350 lots, an increase of 30,678 lots. The net position of the top 20 in soda ash is - 288,637 lots, a decrease of 65,695 lots; that in glass is - 322,568 lots, a decrease of 46,519 lots [2]. - The exchange warehouse receipts of soda ash are 3,761 tons, an increase of 19 tons; those of glass are 877 tons, unchanged [2]. Spot Market - The price of North China heavy soda ash is 1,223 yuan/ton, up 13 yuan; that of Central China heavy soda ash is 1,325 yuan/ton, unchanged. The price of East China light soda ash is 1,250 yuan/ton, unchanged; that of Central China light soda ash is 1,215 yuan/ton, unchanged [2]. - The price of Shahe glass sheets is 1,056 yuan/ton, unchanged; that of Central China glass sheets is 1,070 yuan/ton, unchanged [2]. Industry Situation - The operating rate of soda ash plants is 82.21%, down 4.25 percentage points; the operating rate of float glass enterprises is 75%, down 0.34 percentage points. The in - production capacity of glass is 15.68 million tons/year, an increase of 0.14 million tons/year; the number of in - production glass production lines is 222, a decrease of 1 [2]. - The inventory of soda ash enterprises is 176.69 million tons, an increase of 1.1 million tons; the inventory of glass enterprises is 69,216,000 weight boxes, a decrease of 671,000 weight boxes [2]. Downstream Situation - The cumulative new - construction area of real estate is 231.8361 million square meters, an increase of 53.4777 million square meters; the cumulative completion area of real estate is 183.8514 million square meters, an increase of 27.3729 million square meters [2]. - The central bank plans to increase the revitalization of existing commercial housing and land, and the real - estate market shows a stable trend. In the first five months, the total transaction area of first - and second - hand housing in Shanghai is 10.94 million square meters, a year - on - year increase of 30%. The real - estate market continued to recover in Q1 2025, and the decline has stopped and stabilized [2]. Industry News - The land transfer fees of residential land in 300 cities increased by 24.5% year - on - year in H1 2025. In the 25th week of 2025, the new - house transactions in Shenzhen were 1,150 units, a week - on - week increase of 2%. Two residential - related land parcels in Guangzhou were sold at the reserve price of 2.496 billion yuan [2]. - In June, the number and area of second - hand housing online sign - ups in Guangzhou increased by 7.18% and 8.03% respectively week - on - week. A residential land parcel in Chengdu's Jinniu District was sold for 1.748 billion yuan. The land revenue in Chengdu in H1 increased by 100% year - on - year [2]. - Two residential land parcels in Nanjing's Xuanwu District were sold for about 1.2 billion yuan, and Greentown won a plot for 1.022 billion yuan. China Jinmao spent about 5.144 billion yuan to acquire three land parcels [2]. Macro - aspect - The third - batch funds for consumer goods trade - in will be allocated in July. The operating rate of domestic soda ash plants decreased this week, and the production of soda ash declined. The market supply is still ample, and the profit of domestic soda ash has decreased, with the profit of the ammonia - soda process turning negative [2].

Group 1: Iron Ore Market Overview - Recent spot transactions for iron ore have been weak, with the basis continuing to narrow, and the overall market maintaining a fluctuating pattern [1] - The overall supply of iron ore is gradually recovering, with significant support from new production capacity projects coming online [3] Group 2: Global Manufacturing and Economic Indicators - Global manufacturing is showing weak recovery, with JPMorgan's global manufacturing PMI at 49.6%, down 0.2 percentage points month-on-month, remaining in contraction territory for the second consecutive month [2] - China's official manufacturing PMI increased by 0.5 percentage points to 49.5%, indicating a weak recovery [2] Group 3: Steel Production and Market Dynamics - Steel mills are actively squeezing coking coal profits, leading to a fourth round of price reductions for coking coal, which has improved the profitability of steel mills [4] - The operating rate of 247 steel mills has increased by 0.41 percentage points to 83.82%, with daily molten iron production at 2.4218 million tons, showing resilience despite the seasonal downturn [4] Group 4: Port Inventory Trends - Iron ore port inventory has been decreasing, with a total drop of 389,800 tons to 138.9416 million tons as of June 20, while steel mills' imported ore inventory increased by 1.3756 million tons to 89.3624 million tons [5] - The supply-demand balance for iron ore is expected to weaken in July, with port inventories likely to accumulate slightly, potentially reaching 150 million tons in the second half of the year [5]

Core Insights - The report indicates a continuous adjustment in policies aimed at stabilizing the real estate market, focusing on "stopping the decline and stabilizing" [1][2] - In May 2025, the total sales amount reached 317.7 billion yuan, a month-on-month increase of 2.9% from April's 308.9 billion yuan, with a 17.6% increase in sales for 21 major listed developers [1] - The market share of state-owned enterprises in contract sales slightly decreased to 72.8% in the first five months of 2025 [1] Real Estate Industry Summary - The National Bureau of Statistics reported a narrowing decline in new residential prices in April 2025, with a year-on-year drop of 4.5% and a month-on-month decrease of 0.1% for new homes, while second-hand home prices improved slightly with a year-on-year decline of 6.8% [1] - The report anticipates continued market recovery due to ongoing supportive policies and positive expectations [1] - The demand in the secondary market is expected to improve, while the primary real estate market will remain stable [2] - State-owned enterprise projects are projected to outperform others in sales performance in the second half of 2025 [2] - Long-term investment recommendations include China Resources Land (1109 HK) and Yuexiu Property (123 HK), both of which have demonstrated strong sales performance and execution capabilities in recent years [2]

Group 1: Policy and Market Overview - The Central Committee and State Council issued opinions to promote urban renewal, emphasizing sustainable development and improved urban quality [1] - The Central Political Bureau reiterated the need to stabilize the real estate and stock markets, with financial regulators committed to implementing supportive measures [1] - The People's Bank of China announced a reduction in personal housing provident fund loan rates, which is expected to save residents over 20 billion yuan annually [1] Group 2: Real Estate Market Trends - The real estate market shows signs of recovery, particularly in first- and second-tier cities, with high-quality projects entering the market [3] - In the first quarter, real estate loans increased by over 750 billion yuan, with personal housing loans seeing the largest quarterly increase since 2022 [2] - The inventory of new homes in 12 key cities is 87.71 million square meters, with a de-stocking cycle of 15.2 months, indicating a significant year-on-year reduction [3] Group 3: Company Performance - Vanke Enterprises reported revenue exceeding 340 billion yuan for 2024, leading the industry in transaction volume and housing delivery [5] - China Resources Land's total contract sales for April 2025 were approximately 17.3 billion yuan, reflecting a year-on-year decrease [5] - Yuexiu Property achieved contract sales of approximately 10.29 billion yuan in April 2025, a year-on-year increase of about 23.8% [6]

Summary of Real Estate Industry Conference Call Industry Overview - The real estate industry experienced its first net profit loss in 2024, primarily due to pressure on housing prices leading to record-high inventory impairment provisions, totaling 64.5 billion yuan for key real estate companies [1][3] - The average gross margin for key real estate companies has been declining since 2019, reaching 13.8% in 2024, with signs of stabilization in Q1 2025 [1][5] - The net profit margin for key real estate companies significantly declined, turning negative for the first time, dropping by 7.3 percentage points to -6.2% in 2024 [1][5] Financial Performance - In 2024, the total assets of 36 key real estate companies decreased by 912.5 billion yuan, with liabilities also reducing by over 700 billion yuan, continuing the deleveraging trend since 2021 [2] - The net profit loss for the industry reached 100 billion yuan, with equity decreasing by over 70 billion yuan, a 2.7-fold decline year-on-year [2] - Cash flow pressures are evident, with cash on hand decreasing by 11% year-on-year, and the net debt ratio rising by 11.4 percentage points [6] Sales and Market Dynamics - National sales of commercial housing fell by 17% year-on-year, with the top 100 real estate companies experiencing a 31% decline in sales [1][6] - The inventory turnover rate remained high in 2024 due to accelerated land acquisition, sales, completion, and delivery processes, alongside a significant slowdown in land purchases [7] - Q1 2025 showed some positive signs, with expectations for positive month-on-month growth in May, supported by recent interest rate cuts [1][8] Future Outlook - The anticipated decline in interest rates, with LPR possibly dropping to around 3% and housing fund loan rates to 2.1-2.2%, is expected to stabilize demand and transaction levels in the real estate market [15][16] - The first quarter of 2025 showed a slight increase in settlement gross margin from 16.8% to 16.9%, indicating potential recovery in profitability for some companies [11] - The market is expected to see structural opportunities, particularly for companies that have increased leverage in Q1 2025, which may reflect positively in their financial reports later in the year [12][16] Risks and Considerations - Concerns regarding the impact of trade wars on real estate demand recovery appear to be overstated, with long-term effects expected to be limited [10] - Policy changes, such as the introduction of current housing sales or property taxes, require careful consideration to avoid market volatility [17] - The potential for existing housing sales to affect market sentiment is noted, with the importance of prior notification to developers emphasized to mitigate negative impacts [14]

Group 1 - The Chinese government announced a series of financial policies including a reduction in the reserve requirement ratio (RRR), interest rates, and personal housing provident fund loan rates to alleviate the financial burden on homebuyers [1][2] - The central bank plans to lower the policy interest rate by 0.1 percentage points, which is expected to lead to a similar decrease in the Loan Prime Rate (LPR), potentially bringing the 5-year LPR down to 3.5% [1][2] - The reduction in interest rates is projected to save homebuyers approximately 20,000 yuan in total repayments and 55 yuan in monthly payments for a 1 million yuan loan over 30 years [1][2] Group 2 - The recent reduction in the housing provident fund loan rate by 0.25 percentage points will lower the first home loan rate from 2.85% to 2.6%, enhancing the efficiency of provident fund loans [2] - The central bank's RRR cut of 0.5 percentage points is expected to inject around 1 trillion yuan of long-term liquidity into the market, positively impacting personal mortgage loans, development loans, and real estate financing [2][3] - The "white list" loan approvals by commercial banks have increased to 6.7 trillion yuan, supporting the construction and delivery of over 16 million residential units, indicating a stable real estate market [3]