Investment Rating - The report maintains an "In-Line" industry view for the China Property sector [8] Core Insights - Major developers' sales have seen a significant decline, with contracted sales for 30 tracked developers dropping 32% year-on-year in June, indicating a continued sluggishness expected in 3Q due to weakened resident sentiment and reduced landbank [2][3] - The top 50 and top 100 developers recorded year-to-date sales declines of 11% each as of June 2025, with June sales showing a deeper decline compared to May [3] - State-owned enterprises (SOEs) outperformed in sales despite year-on-year declines, with notable increases from C&D and Jinmao, while other developers like Zhongnan and CIFI faced over 55% declines [4] Summary by Sections Sales Performance - The report highlights that the sales performance of major developers has worsened, with the top 50 and top 100 developers experiencing declines of 26% year-on-year in June, compared to smaller declines in May [3] - SOEs showed resilience with C&D and Jinmao reporting increases of 29% and 17% year-on-year, while several semi-SOE developers faced significant declines [4] Market Outlook - The report anticipates that 3Q sales will remain weak year-on-year, influenced by high inventory levels and cautious consumer sentiment regarding home prices [5] - The report suggests that the housing policy response may be muted until a notable softening in housing prices occurs, which has not yet been observed [5] Investment Strategy - The report advises a defensive and selective investment approach, recommending quality SOEs with good visibility, such as CR Land and C&D, as well as high-dividend-yield plays like C&D and Greentown Management [6]