Investment Rating - The report maintains an "Overweight" rating for the real estate development and services sectors [7]. Core Insights - The central government emphasizes the importance of managing expectations in the real estate market, indicating a proactive approach to stabilize the market [2][3]. - The report highlights that while the traditional real estate development model has reached its limits, the sector remains a crucial foundation for the national economy, with significant demand still to be released [4]. - The report suggests that if policies continue to address expectations effectively, it could accelerate market stabilization [5]. Summary by Sections Investment Opportunities - The report recommends investing in "three good" real estate companies, which are characterized by good credit, good cities, and good products, including companies like China Overseas Development and Longfor Group [5]. - It also highlights companies with strong operational capabilities that can manage cash flow during market adjustments, such as New Town Holdings and Longfor Group [5]. - Companies benefiting from the recovery of the Hong Kong market, like Sun Hung Kai Properties, are also recommended [5]. Policy Management - The report stresses the need for maintaining policy strength, effective supply management, and enhancing information and public opinion guidance to stabilize market expectations [3]. - It notes that policies should align with market expectations and be implemented decisively to avoid a situation where the market and policies are in conflict [3]. Market Dynamics - The report indicates that the real estate market is still adjusting, with significant declines in sales and prices, and mentions the potential for bankruptcies among some companies [2]. - It emphasizes that the real estate sector is closely linked to financial security and household wealth, underscoring its importance in the broader economic context [2]. Company Performance - The report provides detailed performance forecasts for several key companies, adjusting earnings per share (EPS) estimates for various firms based on market conditions and operational performance [12][13][14]. - For instance, Longfor Group's EPS estimates for 2025-2027 have been adjusted to 0.52, 0.68, and 1.04 yuan, reflecting a downward revision due to expected profitability challenges in its development business [12]. - China Overseas Development's EPS estimates have been adjusted to 1.39, 1.48, and 1.60 yuan for the same period, indicating a more optimistic outlook based on its strong market position and project pipeline [12].

Investment Rating - The report maintains a "Positive" investment rating for the real estate industry [12]. Core Insights - The financial attributes of the real estate sector are emphasized, highlighting its importance in the national economy and household wealth, with a focus on expectation management as a key factor in stabilizing the housing market [3][9]. - The report suggests that improving and stabilizing market expectations is strategically significant, with a gradual increase in the probability of relaxed industrial policies [5]. - The current phase of rapid decline in industry volume and price may have passed, with structural highlights in core areas and quality properties [5]. - The report indicates that the current stock position is not significantly premium from the bottom, providing room for a rebound in market valuations [5]. Market Performance - The Yangtze River Real Estate Index decreased by 0.08% this week, with an excess return of +0.50% relative to the CSI 300, ranking 13th out of 32 sectors [6][15]. - The performance of the sector was generally average this week, with only a few development and property management stocks rising, while rental properties showed mixed results [6]. Policy Updates - The personal housing sales value-added tax rate has been reduced from 5% to 3% for properties sold within two years [7]. - The Ministry of Housing and Urban-Rural Development has issued opinions to enhance housing quality, aiming for significant progress by 2030 in standards, design, materials, construction, and operation levels [7]. - Local policies in Shenzhen emphasize promoting high-quality real estate development, focusing on affordable housing and improved commodity housing [7][16]. Sales Data - The rolling year-on-year decline in new and second-hand housing transactions in sample cities has narrowed, with new housing transaction area down by 39.2% year-on-year and second-hand housing down by 26.6% [8]. - Cumulatively, new housing transaction area in 37 cities is down 65.5% year-to-date, while second-hand housing is down 83.6% [8]. Key Issues - The report identifies that the key to improving market expectations lies in continuous industrial upgrades and the enhancement of distribution and security systems, indicating a need for a long-term systemic approach rather than just focusing on total demand [3][9]. - The report highlights that the direct boost to housing price expectations from policy measures is relatively short-term, with structural fiscal or monetary tools being crucial for sustained improvement [3][9].