Investment Rating - Industry Rating: Outperform the market (maintained rating) [3] Core Viewpoints - The report indicates that the real estate sector is experiencing a divergence in performance, with most companies facing a decline in earnings while a few high-quality firms are managing to improve their profitability [1][9] - The overall pre-loss range for 76 listed real estate companies is estimated to be between 35.05 billion and 47.84 billion yuan, with 61.8% of firms expected to report losses [1][9] - The report highlights a potential turning point in the industry, driven by policy support aimed at stabilizing the market and improving fundamentals [3][14] Summary by Sections 1. Company Performance Forecasts - As of July 18, 2025, 76 real estate companies have disclosed their mid-year performance forecasts, with 29 companies expecting profits and 47 anticipating losses [1][9] - Notable companies such as Poly Developments and China Overseas Development have reported significant profit declines exceeding 60% [1][9] - Some mid-sized firms like Deyue City and Chengjian Development have turned losses into profits, primarily due to high-margin project settlements [10][12] 2. Market Transaction Overview - New housing transactions for the week totaled 1.71 million square meters, reflecting a year-on-year decline of 13.17% [2][17] - The second-hand housing market also saw a decrease, with transactions down 7.00% year-on-year [2][17] - The land market recorded a total transaction area of 1.373 million square meters, with a total transaction value of 20.1 billion yuan, showing a year-on-year increase of 18.68% [2][17] 3. Investment Recommendations - The report suggests prioritizing investments in non-state-owned enterprises benefiting from debt relief and policy support, as well as leading firms with product advantages [3][14] - Specific companies recommended for investment include Longfor Group, China Overseas Development, and Poly Developments, among others [3][14]