Summary of China Property Weekly Wrap Industry Overview - The report focuses on the **Chinese property sector**, highlighting recent market activities and policy changes affecting the industry. Key Highlights 1. **Central Level Policies**: - Emphasis on stabilizing market expectations in the property sector due to housing's role as a financial asset and household wealth repository [1] - Policy easing is deemed necessary to align with market expectations and prevent speculation cycles [1] - Recent tax cuts include a reduction in VAT on properties held for less than two years from 5% to 3%, marking the first reduction since 2016 [1] 2. **Market Activity**: - Transaction volumes in the primary market decreased by **18% week-over-week (wow)** and **33% year-over-year (yoy)**, while secondary market transactions fell by **29% wow** and **27% yoy** [2] - Overall market activities softened, with secondary visitation down **9% wow** and new listing supply down **5% wow** [2] - Market sentiment remained stable, with price cuts holding at a ratio of approximately **15 times** those with price increases [2] 3. **Key Data Points**: - New home sales volume averaged **-18% wow** and **-33% yoy**; new home search activities increased by **1.5% wow** [5] - Secondary transactions averaged **-29% wow** and **-27% yoy** [5] - Inventory balance increased by **0.1% wow**, with inventory months at **28.7**, compared to an average of **28.0** in December 2025 [13] 4. **Valuation Insights**: - Stronger state-owned enterprise (SOE) developers saw share prices increase by **6% wow**, with notable performers like Jinmao (+9% wow) and Greentown (+8% wow) [25] - Offshore coverage developers traded at an average **33% discount** to end-2026 estimated net asset value (NAV) [25] - Onshore coverage developers traded at an average **13% discount** to end-2026 estimated NAV [25] 5. **Completions and New Starts**: - Completions are expected to show a **mid-single-digit percentage (MSD)** improvement in December 2025, contrasting with a **-25% to -18% yoy** decline in previous months [18] - New starts are anticipated to decline steeply, reflecting land sales trends and cement shipment ratios [18] Additional Insights - The report indicates a potential decline in home appliance sales based on secondary sales trends in approximately **20 cities** [18] - The overall market remains under pressure, with significant year-over-year declines in both new and existing home sales expected to continue into the next quarter [18] This summary encapsulates the critical aspects of the current state of the Chinese property market, including policy impacts, market activity, and valuation trends, providing a comprehensive overview for investors and stakeholders in the sector.

Summary of Conference Call on China Property Market Industry Overview - The conference call focused on the **China Property** market, specifically analyzing the sales performance of listed property companies in December 2025 and the impact of recent policy changes on the market. Key Points and Arguments December Sales Performance - December sales for 37 listed property companies showed a **22% year-over-year (YoY) decline** but a **40% month-over-month (MoM) increase**, exceeding low expectations due to strong luxury home sales [1] - Notable sales included: - **CRL**: Rmb 41 billion (+28% YoY) - **COLI**: Rmb 40 billion (-1% YoY) - **CMSK**: Rmb 26 billion [1] - High-end projects in cities like Shenzhen, Shanghai, and Beijing drove sales for CRL and COLI, while **Sunac** saw a **70% increase** due to a low base and new launches in Wuhan [1] - **81% of listed companies** experienced a YoY sales drop, indicating a challenging market environment [1] Sales Forecasts - For 2025, a **21% YoY decline** in sales is expected for listed companies, with only **Jinmao** projected to grow by **16%** [3] - The average sales forecast for 2026 is a **12% YoY decline**, with luxury homes and resources being key factors influencing this outlook [3] Secondary Market Trends - Secondary sales dropped **30% YoY** and remained flat MoM in December, hindered by price cuts and a high number of listings (4.64 million units) [1] - The average weekly transaction volume in December was **24.3k units**, comparable to June 2025, but showed a **1.8% YoY decline** [1] Policy Impacts - The **Ministry of Finance** reduced the VAT on homes sold within two years from **5% to 3%**, maintaining a **0% VAT** for homes resold after two years [2] - Local policies in cities like Beijing and Shanghai have eased purchase restrictions and provided subsidies to stimulate demand [2] - The overall impact of these policies is viewed as positive but potentially marginal in terms of immediate market recovery [2] Market Sentiment and Future Outlook - The property sector's share prices corrected in December due to weak sales and disappointing policy easing expectations [4] - Analysts anticipate a round of earnings downgrades in January 2026, particularly for well-known companies, as household confidence remains low [4] - Despite the challenges, luxury mall retail sales showed positive same-store sales growth in Q4, indicating some resilience in the luxury segment [4] - Top investment picks include **Jinmao**, **C&D**, and **CRL** [4] Additional Important Insights - The conference highlighted the ongoing challenges in the property market, including the need for effective policy measures to stabilize the sector and improve consumer confidence [4] - The focus on high-quality urban renewal and targeted local policies is seen as essential for long-term recovery [2][4] This summary encapsulates the key insights from the conference call regarding the current state and future outlook of the China property market, emphasizing the impact of sales performance and policy changes on industry dynamics.