1. Report Industry Investment Rating - Not provided in the report 2. Core Viewpoints of the Report - The raw materials are strong while the steel products are weak, leading to the compression of steel - making profits [3] - The "Three Red Lines" constraint has been alleviated, and the real - estate market expectation has improved. The macro - environment is generally warm [5] - The black industry chain: Steel mills are replenishing stocks for winter storage, and there are still low - level buying orders for steel - making raw materials. The supply - demand pattern of steel is loose, but the cost provides support, and the price fluctuates widely. Currently, steel production and inventory are being reduced, creating conditions for subsequent positive feedback [5] 3. Summary According to Relevant Catalogs 3.1 Overall Market Data - **Supply, Demand, and Inventory**: The report provides supply, demand, inventory data, as well as spot and futures prices and spreads for various steel products such as iron water, scrap steel, rebar, wire rod, hot - rolled coil, cold - rolled coil, and medium - thick plate on January 30, 2026, including week - on - week and year - on - year differences [4] 3.2 Rebar Fundamental Data - **Basis and Spread**: Last week, the Shanghai rebar spot price was 3250 (-20) yuan/ton, the 05 - contract price was 3128 (-14) yuan/ton, the 05 - contract basis was 122 (-6) yuan/ton, and the 05 - 10 spread was -49 (-3) yuan/ton. It shows a situation of weak reality and strong expectation, with basis and spread reverse arbitrage [13][17] - **Demand**: New - home sales remain at a low level, indicating low market confidence. Second - hand home sales remain at a high level, reflecting the existence of rigid demand. Land transaction area also remains at a low level. It is the traditional off - season, and demand has declined [18][21] - **MS Weekly Data**: Supply and demand are both weak, and inventory is healthy. It also shows the supply and inventory data of long - and short - process rebar [23][25] - **Production Profit**: Last week, the rebar spot profit was 129 (-32) yuan/ton, and the main - contract profit was 130 (-12) yuan/ton. Due to the expected resumption of production by steel mills and inventory replenishment, the disk profit has shrunk [28] 3.3 Hot - Rolled Coil Fundamental Data - **Basis and Spread**: Last week, the Shanghai hot - rolled coil spot price was 3270 (-20) yuan/ton, the 05 - contract futures price was 3288 (-17) yuan/ton, the 05 - contract basis was -18 (-3) yuan/ton, and the 05 - 10 spread was -23 (-4) yuan/ton. It shows a situation of weak reality and strong expectation, with basis and spread reverse arbitrage [32][36] - **Demand**: Demand is flat. It is the traditional off - season, and demand has declined. The profit window for exports has not opened, and export orders have decreased [37][38] - **MS Weekly Data**: Hot - rolled coil inventory is high, and production and inventory are being reduced. Production is maintained at a low level [43][44] - **Production Profit**: Last week, the hot - rolled coil spot profit was -13 (-31) yuan/ton, and the main - contract profit was 140 (-15) yuan/ton. Due to the expected resumption of production by steel mills and inventory replenishment, the disk profit has shrunk [46][49] 3.4 Variety Regional Differences - The report shows the regional price differences of rebar, cold - rolled coil, hot - rolled coil, and medium - thick plate, including the price differences between different regions such as Shanghai - Tianjin, Tianjin - Guangzhou, and Shanghai - Guangzhou [55] 3.5 Cold - Rolled and Medium - Thick Plate Supply, Demand, and Inventory Data - It provides the seasonal data of total inventory, production, and apparent consumption of cold - rolled coil and medium - thick plate from 2022 to 2026 [63][64]

Investment Rating - The industry investment rating is "Outperform" [1] Core Viewpoints - The real estate sector has shown a strong start in 2026, with stock price rebounds attributed to overall market risk appetite and valuation increases, recent policy optimizations in Beijing, and a decline in personal housing sales tax rates [3] - The report suggests three main investment lines: companies with light historical burdens and strong product capabilities, Hong Kong real estate benefiting from market stabilization, and firms with stable cash flow and dividends [3] - The policy outlook for 2026 remains optimistic, with expectations for further adjustments in housing loan rates and other supportive measures [4][6] Policy Summary - Recent policies include a reduction in the personal housing sales tax for properties held for over two years, the introduction of commercial real estate REITs, and tax refunds for individuals selling their homes and purchasing new ones within a year [5][6] - The central bank has lowered various structural monetary policy tool rates by 0.25 percentage points, which is expected to reduce housing purchase costs [6][7] Market Conditions - January 2026 saw improved transaction volumes compared to December 2025, with second-hand housing performing better than new homes [17][20] - The average daily transaction volume for new homes in 50 key cities decreased by 27.9% year-on-year in January, while second-hand homes saw a 2.1% increase [20] Land Market - Land transaction volumes increased significantly in December 2025, with a 152.7% rise in transaction area compared to the previous month, although the average land supply decreased by 60.1% [30] Company Performance - The top 100 real estate companies saw a 3.9% increase in land acquisition amounts in 2025, with notable companies like Greentown China and China Jinmao leading in land acquisition intensity [38][42] - The report highlights that the real estate sector's PE ratio is currently at 62.47, significantly higher than the broader market's 14.17, indicating a high valuation level [46]

Investment Rating - The report maintains a "Recommended" rating for the real estate industry [1] Core Insights - The real estate industry is experiencing a decline in sales area, with a total of 880 million square meters sold in 2025, representing a year-on-year decrease of 8.7% [5][9] - In December 2025, the monthly sales area increased by 39.88% month-on-month but decreased by 15.60% year-on-year [5] - The total sales revenue for 2025 was 839.37 billion yuan, down 12.60% year-on-year, with December's sales revenue at 88.07 billion yuan, reflecting a month-on-month increase of 44.09% but a year-on-year decrease of 23.60% [5] - The average sales price for the year was 9,527 yuan per square meter, down 0.20% month-on-month and 4.27% year-on-year [5] - The report anticipates improvements in market expectations due to policy support and effective supply management [5] Sales Summary - National sales area for 2025 was 880 million square meters, with a year-on-year decline of 8.7% [5] - December 2025 saw a monthly sales area of 93.99 million square meters, a month-on-month increase of 39.88% but a year-on-year decrease of 15.60% [5] - The average sales price in December was 9,370 yuan per square meter, reflecting a month-on-month increase of 3.01% but a year-on-year decrease of 9.48% [5] Investment Summary - Total real estate development investment for 2025 was 827.88 billion yuan, down 17.20% year-on-year [13] - December 2025's monthly development investment was 41.97 billion yuan, showing a month-on-month decrease of 16.53% and a year-on-year decrease of 35.79% [13] - New construction area for 2025 was 58.77 million square meters, down 20.40% year-on-year, with December's new construction area at 5.313 million square meters, a month-on-month increase of 20.89% [16] - The total completed area for 2025 was 60.348 million square meters, down 18.10% year-on-year, with December's completed area at 20.894 million square meters, reflecting a significant month-on-month increase of 354.92% [18] Funding Summary - Total funds received by real estate companies in 2025 amounted to 931.17 billion yuan, down 13.40% year-on-year [22] - Domestic loans accounted for 140.94 billion yuan, down 7.3% year-on-year [22] - Self-raised funds totaled 331.49 billion yuan, down 12.20% year-on-year, while deposits and prepayments were 280.89 billion yuan, down 16.20% year-on-year [22] Investment Recommendations - The report highlights several companies with strong operational management and financial advantages, including China Merchants Shekou, Poly Developments, and Longfor Group, among others [39] - It suggests focusing on quality developers like Greentown China and China Overseas Development, as well as property management leaders like Greentown Service [39]

Core Viewpoint - The Chinese real estate market has been in decline since 2021, with significant drops in housing prices and sales, leading to a lack of consumer confidence and a stagnant market [2][4][6] Group 1: Market Conditions - Housing prices are expected to continue declining until the end of 2025, with a significant drop in sales volume by 13% last year [4][6] - The market is characterized by a supply-demand imbalance, with local oversupply and falling prices [2][4] - The government has implemented over 3,000 policies in the past four years, including lowering down payments to 15% and interest rates to 3.5%, yet prices continue to fall [4][6] Group 2: Policy Recommendations - A recent article in "Qiushi" magazine suggests a shift in policy approach, advocating for a comprehensive and decisive strategy to stabilize the market rather than piecemeal measures [2][6] - The article emphasizes the need for a unified policy assessment to ensure that real estate policies align with broader economic strategies [10] - The government aims to stabilize housing prices to protect household wealth, rather than to drive speculative gains [4][6] Group 3: Future Outlook - The article indicates that 2026 may be a turning point for the real estate market, with expectations for a potential stabilization and slight recovery in housing prices if decisive actions are taken [6][10] - There is a call for the government to learn from international experiences, particularly from Japan and the U.S., where housing markets stabilized after similar downturns [4][6] - The focus is shifting from growth to safeguarding livelihoods, with an emphasis on meeting the housing needs of young families [8][10]

Investment Rating - The report does not explicitly provide an investment rating for the industry Core Insights - The real estate sector remains a foundational industry for the national economy, contributing 13% to GDP and directly supporting 70 million jobs in China. The potential for new residential construction is significant, estimated at 10 million to 14.9 million units annually, translating to approximately 600 to 900 million square meters of new housing [1][11] - There is a substantial demand for housing updates, with an estimated 700 million square meters needed annually due to a 2% depreciation rate on the existing housing stock of approximately 35 billion square meters [1][11] - The business model in real estate is shifting from a high-cost model to an integrated approach of product-service-operation, emphasizing quality and diverse living services over mere availability [1][11] - The capital market is expected to see an 18.4% increase in the Shanghai Composite Index in 2025, while the building materials index, excluding the fiberglass sector, is underperforming. Companies with strong alpha attributes in the real estate chain are gaining market recognition despite the overall industry not stabilizing yet [2][12] - The report highlights the importance of monitoring the fundamental changes in the real estate sector in 2026, as well as the performance of companies like China Jushi, which is planning to grant stock options to employees, indicating a focus on long-term profitability [2][12] Summary by Sections Weekly Discussion - The real estate sector is crucial for the economy, with a significant contribution to GDP and employment. The potential for new housing construction is substantial, and there is a large demand for housing updates [1][11] - The shift in real estate business models towards integrated services is noted, with a call for decisive policy support to avoid market and policy conflicts [1][11] Market Performance - The building materials index has decreased by 1.25%, with specific sectors like glass manufacturing and fiberglass showing notable declines. The overall market sentiment remains cautious [2][16] - Despite the downturn, certain companies in the real estate supply chain are experiencing growth and valuation premiums, indicating potential investment opportunities [2][12] Price Changes in Building Materials - The average price of cement has decreased to 353 CNY per ton, with a national average shipment rate of 40.3%. The market is experiencing downward pressure on prices due to weak demand [3][20][21] - The price of float glass has seen a slight decline, with the average price at 1121.29 CNY per ton. Inventory levels are decreasing, but overall market sentiment remains weak [3][28][42] - The fiberglass market is stable, with prices for 2400tex direct yarn remaining steady at around 3535.25 CNY per ton, indicating a balance between supply and demand [3][49][53]

Core Viewpoint - The article emphasizes the importance of stabilizing and improving expectations in the real estate market, marking a critical window for policy intervention and industry transformation as the market faces significant challenges [1][3]. Group 1: Current Market Conditions - The real estate market is experiencing a critical phase with unstable expectations, highlighted by a 27.4-month inventory cycle for new homes in 100 cities and a 40.3-month cycle in third and fourth-tier cities. Additionally, second-hand home prices in 70 cities have declined for 19 consecutive months, with a 7.2% year-on-year drop in sales area [3]. - The current environment has led to a strong wait-and-see sentiment among buyers, insufficient investment confidence from real estate companies, and liquidity issues in the market [3]. Group 2: Key Signals from the Article - Signal One: The article reaffirms the core value of the real estate industry, emphasizing its significant financial asset attributes and correcting the notion that its importance is declining. It states that real estate is a crucial industry for the national economy and a major source of household wealth, impacting key economic indicators [5][6]. - Signal Two: The policy approach is shifting towards providing comprehensive support, with a call to eliminate restrictive measures and ensure that new and old policies work in tandem. This aims to break the deadlock in market dynamics and stimulate demand [6][8]. - Signal Three: The article outlines a transition from a high-debt, high-leverage model to one focused on quality improvement and efficiency in existing stock. It identifies new urban residents and young people as key demand drivers and highlights the potential for updating existing housing stock [8][9]. Group 3: Opportunities and Implications - For homebuyers, the current window presents opportunities through policy benefits such as relaxed purchase restrictions, lower mortgage costs, and enhanced support from public funds, leading to reduced barriers to homeownership [9]. - For real estate companies, this period is crucial for transformation, moving away from traditional expansion models towards integrated service offerings, including green and smart housing developments [10]. - The market is expected to see a differentiation in recovery, with core cities likely stabilizing first due to their population and economic advantages, while third and fourth-tier cities will focus on inventory reduction [10][11].