Group 1: Report Industry Investment Rating - No relevant content found Group 2: Core Views of the Report - The new SHUION 29 rose 0.6pt from RO at 98.423 yesterday, while the existing SHUION 26 retraced 0.2pt [2] - KUAISH 31 - 36s and TW lifers tightened 1 - 3bps this morning, and FUTLAN 28/VLLPM 29 rose 0.6 - 0.9pt [3] - In 2025, the cumulative contracted sales of 31 Chinese developers dropped 21.5% yoy to RMB1,757.6bn [3][8] - A new round of demand - driven stimulus on the property market may come in 1Q26, but the recovery will likely remain slow due to weak homebuyers' confidence [9] - CMBI economic research expects a 10bp cut in LPR in 1Q26, followed by an additional 10bp LPR cut in 3Q26, which should support the weak housing market [9] Group 3: Summary by Related Catalogs Trading Desk Comments - Yesterday, new issues like KUAISH 31 - 36s tightened 2bps earlier in the day but closed unchanged, and TW lifers closed 2 - 5bps wider [2] - In Greater China, beta IG name ZHOSHK 28 closed 1bp wider, and CHIOIL 26 was 0.1pt lower [2] - In HK, FAEACO 12.814 Perp rose 1.1pts, while LIFUNG 5.25 Perp dropped 2.8pts [2] - In Chinese properties, LNGFOR 27 - 32 were 0.4pt lower to 0.3pt higher, and FUTLAN 28/FTLNHD 26 - 27 were unchanged to 0.3pt lower [2] - In KR, financial and corporate names faced selling pressure, with spreads widening 1 - 3bps [2] - In JP, 10yr bonds NTT 35/MUFG 35 - 36s/SOBKCO 35/SMBCAC 35/TACHEM 35 were 5 - 6bps wider [2] - In SE Asia, BBLTB/OCBCSP T2s widened 1 - 6bps, and TOPTB 6.1 Perp/IHFLIN 27 - 30s was 0.1pt lower [2] - In the Middle East, KSA/QATAR long - end bonds were down 0.3 - 0.5pt [2] - In the overall IG FRN space, lower - beta names were 1 - 2bps wider [2] Macro News Recap - On Tuesday, S&P (-2.06%), Dow (-1.76%), and Nasdaq (-2.39%) were lower, triggered by Trump's Greenland tariff threat and Japan's political situation [6] - UST yield was higher on Tuesday, with 2/5/10/30 year yield at 3.60%/3.86%/4.30%/4.91% [6] Desk Analyst Comments - In Dec'25, 31 developers reported contracted sales of RMB186.2bn, a 15.3% yoy decrease from RMB219.9bn in Dec'24 [7] - Only 2 out of 31 developers reported yoy increase in contracted sales in 2025: CHJMAO and GRNLGR with 16% and 7% increases respectively [8] - The bottom performers in 2025 were GEMDAL, JINGRU, and CIFIHG, with their contracted sales dropping 56%, 55%, and 52% yoy respectively [8] Offshore Asia New Issues (Priced) - The Republic of the Philippines issued 500mn/1500mn USD bonds with 5.5yr/10yr tenors, 4.25%/5.0% coupons, and issue ratings of Baa2/BBB+/BBB [11] - Toyota Finance Australia issued bonds with various tenors and coupons, including a 3.25yr bond at SOFR + 60 and a 25yr bond at 5.75% [11] - Woori Bank issued 300mn/300mn USD bonds with 3yr/5yr tenors, SOFR + 48/4.125% coupons, and an issue rating of A1/A+/- [11] Offshore Asia New Issues (Pipeline) - Korea Development Bank plans to issue bonds with 3yr/5yr/5yr/10yr tenors and coupons like SOFR + 41/SOFR + 52/SOFR Equiv/SOFR + 70, with an issue rating of Aa2/AA/AA - [12] News and Market Color - Yesterday, 93 credit bonds were issued onshore with an amount of RMB84bn, and month - to - date, 1,134 credit bonds were issued with a total amount of RMB934bn, a 24.5% yoy decrease [13] - China Oil & Gas postponed its USD Reg S 3NC2 bond offering due to market volatility [3][13] - Seazen Group agreed to sell Seazen Resources Securities for HK 62.8mn [13]

Summary of the Conference Call on China Property Industry Industry Overview - The conference call focuses on the **China Property** industry, particularly the outlook for the fourth quarter of 2025 and the performance of State-Owned Enterprises (SOEs) versus Private-Owned Enterprises (POEs) in the sector [2][4][10]. Key Points and Arguments 1. **Muted Nationwide Policy**: - The expectation is that meaningful nationwide housing stimulus will remain muted in 4Q 2025 due to several factors: - Recent home price declines have been steady but less severe compared to the period before the 2024 housing stimulus [4][10]. - No new risk points have emerged from weakened property sales [4]. - The property sector's role in driving GDP growth has diminished [4]. - Housing is unlikely to be a focus in the upcoming Fourth Plenary Session [4]. 2. **Weak Physical Market Anticipated**: - The market has priced in deeper year-on-year declines in property sales for 4Q based on: - High-frequency data indicating wider year-on-year declines [5]. - Continued deterioration in secondary listing prices and volumes [5]. - Marginal easing in tier 1 cities [5]. - An escalating base effect due to easing measures in September of the previous year [5]. - Any better-than-expected performance from individual developers could be seen as an upside surprise [5]. 3. **Stock Recommendations**: - The call suggests accumulating positions in quality SOEs, particularly **CR Land** and **C&D**, which are expected to outperform due to their strong sales potential amid margin recovery [6][10][11]. - Caution is advised regarding POEs, as their older and depleting landbanks may negatively impact sales and earnings [6]. 4. **Long-term and Tactical Stock Ideas**: - **CR Land (1109.HK)**: Expected business transformation and potential upward revisions on mall rentals [11]. - **C&D (1908.HK)**: Anticipated strong launches of high-margin projects leading to a projected earnings CAGR of over 15% from 2024 to 2027 [11]. - Tactical plays include **COLI (0688.HK)**, **Jinmao (0817.HK)**, and **Yuexiu**, which are seen as fundamental beneficiaries due to their below-peer price-to-book ratios [11][12]. 5. **Consumption Beneficiary**: - **CR Mixc (1209.HK)** is highlighted for its positive same-store sales growth and improving cash collection, which enhances dividend visibility [12]. Additional Important Insights - The overall sentiment indicates a cautious outlook for the property market, with expectations of continued challenges in the near term [4][5]. - The call emphasizes the importance of selecting quality SOEs for potential investment, given the anticipated market pull-back [6][10]. - Analysts express a belief that the current environment may present a good entry point for investors looking for quality assets in the property sector [2][6]. This summary encapsulates the key insights and recommendations from the conference call regarding the China Property industry, focusing on the anticipated market conditions and stock performance outlook for the fourth quarter of 2025.

Investment Rating - The report does not explicitly state an overall investment rating for the industry but highlights specific companies with "Buy" and "Sell" recommendations [49][50]. Core Insights - The primary market is experiencing a continued decline, with new home sales volume down 30% week-over-week and 26% year-over-year, while tier-3 and Central & Western cities are outperforming [5][9]. - Secondary market transactions are showing a slight decline, with average sales down 2% week-over-week and 3% year-over-year, indicating negative price appreciation expectations from agents and homeowners [26][28]. - The focus on urban renewal policies is expected to positively impact the market, particularly through demand-side stimulus measures such as urban village redevelopment [2]. Summary by Sections Market Performance - New homes sales volume decreased by 30% week-over-week and 26% year-over-year, with tier-3 and Central & Western cities outperforming [5]. - Secondary transactions were down 2% week-over-week and 3% year-over-year, with negative price expectations from agents and homeowners [26]. - Year-to-date, primary gross floor area (GFA) sold is down 1% year-over-year, while secondary GFA sold is up 16% year-over-year [8][28]. Inventory and Completions - Inventory balance decreased by 0.1% week-over-week and 3.9% from the end of 2024, with inventory months at 26.0 [36]. - Completions are expected to decline by mid-to-high teens year-over-year for June 2025, with a projected 10% decline for the full year [41]. Valuation and Developer Performance - Offshore developers saw an average share price increase of 6% week-over-week, outperforming the MSCI China index [49]. - Onshore developers averaged a 2% increase week-over-week, with specific companies like China Jinmao and Longfor receiving "Buy" ratings [49][50]. - The average price-to-book (P/B) ratio for offshore and onshore coverage is at 0.5X for 2025E, indicating a significant discount to net asset value (NAV) [49].