Summary of Key Points from REITs Conference Call Industry Overview - The REITs market has experienced a valuation correction, providing entry opportunities for investors as valuations have returned to a reasonable range, with the standard deviation indicating a departure from previously high levels [1][2] Core Insights and Arguments - **Industrial Park Sector**: The industrial park segment continues to show weakness, particularly in second-tier cities where the marginal decline has exceeded expectations due to poor supply-demand dynamics. The supply side remains large, while demand is contracting as companies focus on cost reduction [1][4] - **Logistics and Warehousing**: The logistics and warehousing sector outperformed expectations in Q2, rebounding after a decline influenced by tariffs. The South China region faces significant supply pressure, while the North and East China regions continue to experience rental pressure. The Chengdu-Chongqing area shows signs of marginal recovery [1][11] - **Affordable Rental Housing**: The affordable rental housing sector demonstrated stability in Q2, with a 3.5% increase in revenue and high occupancy rates around 96%. This sector is noted for its strong anti-cyclical properties [1][14] - **Consumer REITs**: The consumer REITs sector faced seasonal impacts, with a general revenue decline of 5.5% in Q2. REITs with a high proportion of joint ventures experienced more significant fluctuations [1][15] Additional Important Insights - **Highway REITs**: There is operational differentiation within highway REITs, with overall toll revenue declining but EBITDA increasing due to effective cost control. Passenger vehicle revenue decreased while freight vehicle revenue increased, indicating a recovery in freight demand [3][18][20] - **Energy and Environmental REITs**: Wastewater treatment projects outperformed waste-to-energy projects. The market for renewable energy projects is influenced by regional policies and market pricing reforms [3][19][25] - **Market Dynamics**: The REITs market has seen a general adjustment, with an index decline of approximately 3% and individual securities experiencing declines of 5% to 8%. This adjustment is primarily driven by profit-taking behavior [2][27] - **Future Considerations**: Investors are advised to focus on projects with proven operational capabilities and stable income sources, particularly in the context of ongoing market volatility and economic uncertainty [6][9][31] Conclusion - The REITs market is currently characterized by a mix of challenges and opportunities across various sectors, with a notable emphasis on the importance of operational efficiency and market adaptability in navigating the evolving landscape.

Group 1 - The article discusses the author's journey into investing, starting in high school in 2011, focusing on REITs, preferred stocks, and high-yield bonds, indicating a long-standing interest in markets and the economy [1] - The author has recently adopted a strategy that combines long stock positions with covered calls and cash secured puts, emphasizing a fundamental long-term investment approach [1] - The author primarily covers REITs and financials on Seeking Alpha, with occasional articles on ETFs and other stocks influenced by macro trade ideas [1]

Investment Rating - The report provides a cautious outlook on the C-REITs sector, indicating a rating of "C" due to underperformance in the second quarter and market volatility [1][5]. Core Insights - The C-REITs market has experienced a significant downturn, with the CSI REITs total return index declining by 1.56% this week and 1.79% for the closing index, reflecting broader market challenges [1][10]. - Year-to-date, the CSI REITs total return index has increased by 12.34%, indicating some resilience despite recent fluctuations [2][10]. - The report highlights that the municipal water conservancy and energy infrastructure sectors have faced the most substantial declines in the secondary market, with average market capitalization for listed REITs around 204.75 billion [3][12]. Summary by Sections REITs Index Performance - The CSI REITs total return index closed at 1087.4 points, down 1.56% this week, while the closing index was at 860.1 points, down 1.79% [1][10]. - Comparatively, the Shanghai and Shenzhen 300 indices rose by 1.69% and 2.27% respectively, indicating a relative underperformance of the REITs sector [1][10]. REITs Secondary Market Performance - The secondary market for C-REITs has seen a significant pullback, with 9 out of 68 listed REITs rising and 59 declining, resulting in an average weekly decline of 2.09% [3][12]. - The report notes that the municipal water conservancy and energy infrastructure sectors have been particularly hard hit, with declines of 4.2% and 4.39% respectively [3][12]. REITs Valuation Performance - The internal rate of return (IRR) for listed REITs shows significant differentiation, with top performers including Huaxia China Communications REIT at 11.2% and Ping An Guangzhou Guanghe REIT at 10.9% [5][12]. - The price-to-net asset value (P/NAV) ratio for REITs ranges from 0.7 to 1.8, with Huaxia China Communications REIT being noted for its lower P/NAV of 0.7 [5][12]. Industry Trends - The report indicates a potential for recovery in the REITs market in 2025, driven by a low interest rate environment and macroeconomic improvements, suggesting that timing will be crucial for secondary market investments [5][12].

Key Insights - The report highlights the importance of high-quality urban renewal and the need for a new model of real estate development as emphasized by national leaders [3][4] - It notes a significant increase in broad fiscal spending intensity, with public budget expenditures reaching 28,318 billion yuan in June, reflecting a year-on-year growth of 0.4% [8][10] - The report discusses the ongoing transformation in the banking sector regarding interest rate risks and the expected upward trend in bond market yields due to increased volatility in funding rates [29][51] Macro Economic Analysis - The focus on urban renewal and domestic circulation is expected to enhance economic growth, with policies aimed at boosting consumption and diversifying supply [3][4] - The government is pushing for a balanced housing system through the newly released housing rental regulations [4] - The report indicates that the fiscal revenue growth rate has slowed, with a marginal improvement in tax revenue, while non-tax revenue continues to decline [10][11] Industry Insights - The AI application sector is highlighted as a growth area, with companies like Tuolisi and Songlin Technology positioned to benefit from advancements in AI and robotics [40][41] - The dietary supplement industry is projected to grow significantly, driven by increasing health awareness and an aging population, with global sales expected to reach 223 billion dollars by 2026 [42][43] - The report identifies opportunities in the liquor sector, particularly low-valuation white liquor stocks, as they are seen as defensive assets amid economic uncertainties [45][46] Financial Sector Overview - The report notes a significant increase in trading volume, with daily transactions surpassing 20 trillion yuan, indicating a recovery in market activity [49][50] - The insurance sector is experiencing a reduction in preset interest rates, which is expected to lower liability costs and support the transition of traditional insurance products [51][52] Energy and New Materials - The solid-state battery industry is making progress with breakthroughs in materials and acceleration in pilot production, indicating a positive outlook for the sector [54]

Group 1 - The article discusses the author's journey into investing, starting in high school in 2011, focusing on REITs, preferred stocks, and high-yield bonds, indicating a long-standing interest in markets and the economy [1] - The author has recently adopted a strategy that combines long stock positions with covered calls and cash secured puts, emphasizing a fundamental long-term investment approach [1] - The author primarily covers REITs and financials on Seeking Alpha, with occasional articles on ETFs and other stocks influenced by macro trade ideas [1]

Report Industry Investment Rating No relevant content provided. Core Viewpoints of the Report - From July 21 - 25, 2025, the CSI REITs Total Return Index closed at 1087.36 points, down 1.56% for the week, breaking below the 1100 - point mark, with a relatively large overall correction. The total market capitalization of the REITs market reached 204.7 billion yuan with 69 listed projects after the listing of CICC Principal Agricultural REIT [1][8]. - In terms of major asset classes, commodities and equities generally rose in July, while REITs had negative returns. Commodities performed strongly this week, with coking coal up 35%, and coke, lithium carbonate, polysilicon, soda ash, and glass up over 15%. The equity market rose between 1.5 - 3.5%, and indices such as the CSI 300, CSI 500, CSI 1000, Hang Seng Tech, and CSI Convertible Bond all outperformed REITs [1][8]. Summary by Related Catalogs Secondary Market Price: The Rental Housing Sector Had the Largest Decline - All seven REITs sectors declined this week, with rental housing having the largest decline of 3.23%. Industrial parks and warehousing logistics were relatively more resilient. Eight rental housing REITs generally fell 3 - 5%. Some previously high - performing rental housing REITs like CRIC Wanke Shenzhen Rental Housing had a decline of about 3% this week. The average cash distribution rate of rental housing is 2.76%. REITs with high distribution rates such as Shanghai Real Estate Rental Housing and Chengtou Kuanting Rental Housing can be continuously monitored [2][13]. - In the highway sector, there were still differences among projects in June. Projects in the eastern economically active regions had better year - on - year performance in traffic volume and toll revenue. Huaxia Nanjing Traffic Highway REIT had the largest decline this week, but its operation has good resilience. Projects like China Merchants Highway and CICC Anhui Expressway had good fundamentals and can be continuously monitored [2][15]. Liquidity: Trading Activity Recovered - The overall market trading was relatively active this week, with the average daily trading volume of 583 million yuan, the average daily trading volume of 129 million shares, and the average daily turnover rate of 0.63%, up 17.72%, 15.22%, and 0.08 pct respectively from the previous week [20]. - By sector, the sectors with the highest average daily turnover rates this week were municipal environmental protection (1.06%), rental housing (0.78%), and consumer facilities (0.73%). Most sectors' turnover rates continued to decline compared with last week, except for consumer facilities and warehousing logistics, whose turnover rates slightly increased [23]. - Five projects were lifted from lock - up in July. With a large number of projects approaching the end of their lock - up periods from the second half of 2025 to the first half of 2026, potential trading pressure from recent lock - up expirations needs to be monitored [28]. Valuation: The Overall Decline Led to Valuation Adjustment - The overall decline of REITs this week led to valuation adjustments, and the distribution rate increased slightly. In terms of ChinaBond valuation yields, the energy infrastructure sector had the largest change in yield but still had the lowest yield among all sectors. The traffic (5.69%), warehousing logistics (5.09%), and industrial park (4.81%) sectors had relatively high yields [31]. - In terms of cash distribution rates, energy - related projects still had the largest change, with the average rising to 8.28%. For concession - based projects, the principal recovery situation should be considered when looking at the cash distribution rate. Among equity - based projects, industrial parks (4.33%), warehousing (4.11%), and consumer facilities (3.79%) had relatively high distribution rates, while the average distribution rate of rental housing was only 2.76% [31]. Primary Market Initial Offering: China Aerospace Tianhong Consumer REIT Has Been Filed - On July 22, 2025, China Aerospace Tianhong Consumer Closed - end Infrastructure Securities Investment Fund was filed with the Shenzhen Stock Exchange. Tianhong Co., Ltd. has three major brands: "Tianhong", "Junshang", and "sp@ce", targeting the mid - to high - end consumer market [3][35]. - As of July 25, 2025, there were about 7 - 10 potential issuance projects remaining this year. There are 4 projects that have been approved and are waiting to be listed, 10 projects that have received feedback from the exchange, and 1 project that has been filed [35].

Investment Rating - The industry investment rating is "Positive" (maintained) [1] Core Viewpoints - The REITs market is expected to continue to offer good investment opportunities due to the downward pressure on bond market interest rates, the "asset shortage" logic, and the expected inflow of social security and pension funds [5][6] - The market remains active with 12 REITs funds waiting to be listed, indicating ongoing interest and activity in the sector [8] Market Overview - As of the 30th week of 2025, the CSI REITs (closing) index was 860.11, up 8.11% year-on-year but down 1.79% month-on-month; the CSI REITs total return index was 1087.36, up 16.32% year-on-year but down 1.56% month-on-month [5][21] - The trading volume in the REITs market reached 741 million units, a year-on-year increase of 12.1%, with a transaction value of 3.348 billion yuan, up 29.17% year-on-year [28][30] Sector Performance - Weekly and monthly performance for various REIT sectors showed declines: affordable housing (-3.09%), environmental (-2.02%), expressways (-1.32%), industrial parks (-0.87%), warehousing and logistics (-0.69%), energy (-3.75%), and consumer REITs (-0.82%) [38][55] - Monthly performance for these sectors included declines for affordable housing (-5.88%), environmental (+0.04%), expressways (-1.64%), industrial parks (-1.22%), warehousing and logistics (+0.15%), energy (-4.85%), and consumer (-0.90%) [38] Recent Developments - Tianhong Consumer REIT has submitted its initial public offering application to the Shenzhen Stock Exchange, while Chuangjin Hexin Shounong REIT has successfully listed on the Shanghai Stock Exchange, raising 3.685 yuan per share with a total fundraising of 3.685 billion yuan [6][14]

Report Industry Investment Rating No information about the industry investment rating is provided in the content. Report's Core View From July 21 to July 25, 2025, the secondary - market prices of publicly - listed REITs in China generally declined. The weighted REITs index had a return rate of - 1.73%. Compared with other mainstream asset classes, REITs performed weakly. In terms of different project attributes and underlying asset types, there were differences in price trends, trading volumes, and capital flows. A new REIT, Chuangjin Hexin Shounong REIT, was listed on July 25, 2025, and a new project, "Zhonghang Tianhong Consumption Closed - end Infrastructure Securities Investment Fund", was reported for the first time [1][4]. Summary According to Relevant Catalogs 1. Secondary Market 1.1 Price Trends - **At the level of major asset classes**: From July 21 to July 25, 2025, the secondary - market prices of publicly - listed REITs in China generally declined. The returns of the CSI REITs (closing) and CSI REITs total return indices were - 1.79% and - 1.56% respectively, and the weighted REITs index return was - 1.73%. Among major asset classes, the return of REITs ranked the lowest, with the order from high to low being convertible bonds > A - shares > US stocks > gold > pure bonds > crude oil > REITs [10]. - **At the level of underlying assets**: Both equity - type and franchise - type REITs' secondary - market prices declined, with equity - type REITs having a smaller decline. In terms of underlying asset types, park - type REITs had the smallest decline. The top three underlying asset types in terms of returns were park - type, warehousing and logistics, and transportation infrastructure, with returns of - 0.63%, - 1.09%, and - 1.44% respectively [15][18]. - **At the single - REIT level**: Excluding the newly - listed Chuangjin Hexin Shounong REIT, 9 REITs rose and 59 declined. The top three in terms of increase were Boshi Jinkai Industrial Park REIT, China Merchants Science and Technology Innovation REIT, and Huatai Jiangsu Expressway REIT, with increases of 8.49%, 3.79%, and 2.2% respectively. The top three in terms of decline were CITIC Construction Investment Mingyang Smart New Energy REIT, ICBC Mengneng Clean Energy REIT, and AVIC Yishang Warehousing and Logistics REIT, with declines of 8.49%, 6.89%, and 6.07% respectively [1][22]. 1.2 Trading Volume and Turnover Rate - **At the level of underlying assets**: The trading volume of publicly - listed REITs this week was 3.35 billion yuan, and the average daily turnover rate of park infrastructure - type REITs was the highest. The top three in terms of trading volume were park infrastructure, transportation infrastructure, and consumer infrastructure, with trading volumes of 1.042 billion, 0.59 billion, and 0.457 billion yuan respectively. The top three in terms of average daily turnover rate were park infrastructure, ecological and environmental protection, and municipal facilities, with rates of 1.70%, 1.21%, and 1.15% respectively [26]. - **At the single - REIT level**: The trading volume and turnover rate of single REITs continued to show differentiation. The top three in terms of trading volume were Chuangjin Hexin Shounong REIT, Huaan Zhangjiang Industrial Park REIT, and Southern SF Logistics REIT. The top three in terms of trading amount were Chuangjin Hexin Shounong REIT, Huaxia China Resources Commercial REIT, and Huaan Zhangjiang Industrial Park REIT. The top three in terms of turnover rate were Chuangjin Hexin Shounong REIT, Huaxia Jinyu Zhizao Factory REIT, and CICC Yizhuang Industrial Park REIT [27]. 1.3 Main Force Net Inflow and Block Trading - **Main force net inflow situation**: The total net inflow of the main force this week was 95.17 million yuan, and the market trading enthusiasm increased. The top three underlying asset types in terms of net inflow were park infrastructure, warehousing and logistics, and water conservancy facilities, with net inflows of 97.18 million, 10.64 million, and 3.21 million yuan respectively. The top three single REITs in terms of net inflow were Chuangjin Hexin Shounong REIT, Huaxia Shen International REIT, and Hongtu Innovation Yantian Port REIT, with net inflows of 88.48 million, 4.95 million, and 4.9 million yuan respectively [31]. - **Block trading situation**: The total block trading amount this week was 127.05 million yuan, a decrease compared with last week. The highest single - day block trading amount was on July 22, 2025, which was 50.12 million yuan. The top three single REITs in terms of block trading amount were Ping An Guangzhou Guanghe REIT, AVIC Jingneng Photovoltaic REIT, and CITIC Construction Investment Mingyang Smart New Energy REIT, with trading amounts of 50.12 million, 39.96 million, and 19.37 million yuan respectively [32]. 2. Primary Market 2.1 Listed Projects As of July 25, 2025, there were 69 publicly - listed REITs in China, with a total issuance scale of 180.746 billion yuan. The transportation infrastructure - type had the largest issuance scale, followed by park infrastructure - type. Chuangjin Hexin Shounong REIT was listed on July 25, 2025, with an asset type of park infrastructure and an issuance scale of 3.685 billion yuan [36]. 2.2 Projects to be Listed There were 26 REITs in the state of being to be listed, including 15 initial - offering REITs and 11 REITs to be expanded. The status of the initial - offering project of "Zhonghang Tianhong Consumption Closed - end Infrastructure Securities Investment Fund" was updated to "reported" this week [39].

Report Industry Investment Rating No relevant content provided. Core Viewpoints of the Report - The second-quarter reports of REITs were released this week, with overall revenue down 2.6% year-on-year and 5.8% quarter-on-quarter, and distributable income up 4.1% year-on-year and down 8.7% quarter-on-quarter. The performance of affordable housing and consumer sectors was the most robust, while the energy sector was greatly affected by seasonal factors. The distributable income of AVIC Jingneng Photovoltaic improved significantly. The distributable income of warehousing and logistics was differentiated year-on-year and increased quarter-on-quarter. The transportation (highway) sector was affected by the diversion effect of surrounding road networks and increased rainfall, with only Huatai Jiangsu Expressway REIT achieving a year-on-year increase in distributable income. The performance of industrial parks declined significantly [3]. - As of July 25, 2025, 14 REITs have been successfully issued this year, with a total issuance scale of 27.87 billion yuan, a year-on-year increase of 2.1%. Two new REITs made progress this week: the newly declared Zhonghang Tianhong Consumer REIT with the underlying asset of Xiangcheng Tianhong Shopping Center in Suzhou, and the listing of Chuangjin Hexin Shounong REIT with a first-day increase of 28.47%. There was no new progress in the expansion of existing REITs this week [3]. - The CSI REITs Total Return Index closed at 1087.36 points this week, down 1.56%, underperforming the CSI 300 by 3.25 percentage points and the CSI Dividend by 3.86 percentage points. The CSI REITs Total Return Index has increased by 12.34% since the beginning of the year, outperforming the CSI 300/CSI Dividend by 7.46/11.41 percentage points. In terms of project attributes, equity REITs fell 1.91% and concession REITs fell 2.67%. In terms of asset types, the industrial park (-1.07%), ecological environment protection (-1.33%), consumer (-1.59%), and warehousing and logistics (-2.06%) sectors performed relatively well [3]. - The average daily turnover rate of CSI REITs this week was 0.54%, a decrease of 2.13 basis points from last week. The average daily turnover rates of equity/concession REITs were 0.79%/0.54%, an increase of 21.16/5.99 basis points from last week. The trading volumes within the week were 592 million/148 million shares, a week-on-week increase of 37.23%/14.10%. The ecological environment protection sector was the most active [3]. - From the perspective of ChinaBond valuation yields, the yields of equity/concession REITs were 3.89%/4.62%. The transportation (5.79%), warehousing and logistics (5.31%), and industrial park (4.32%) sectors ranked among the top three [3]. Summary by Relevant Catalogs 1. Primary Market: Listing of Chuangjin Hexin Shounong REIT - As of July 25, 2025, a total of 73 REITs have been issued, with a total issuance scale of 191.1 billion yuan, a total market value of 204.6 billion yuan, and a circulating market value of 96.8 billion yuan. In terms of project attributes, 49 were equity REITs and 24 were concession REITs. In terms of asset types, there were 8 affordable housing, 10 warehousing and logistics, 19 industrial parks, 9 consumer, 2 data centers, 13 transportation, 9 energy, and 3 ecological environment protection and water service REITs [10]. - This week, two new REITs made progress: the newly declared Zhonghang Tianhong Consumer REIT with the underlying asset of Xiangcheng Tianhong Shopping Center in Suzhou, and the listing of Chuangjin Hexin Shounong REIT on July 25, 2025, with a first-day increase of 28.47%. Currently, there are 16 REITs under application for initial public offering, 6 of which have been questioned and responded, and 4 of which have been registered and are awaiting listing. There are 10 REITs under application for expansion, 4 of which have been questioned and responded, and 3 of which have passed the review [3][11]. 2. Secondary Market: General Decline in All Sectors This Week, with Improved Liquidity 2.1 Market Review: The CSI REITs Total Return Index Fell 1.56% - The CSI REITs Total Return Index closed at 1087.36 points this week, down 1.56%, underperforming the CSI 300 by 3.25 percentage points and the CSI Dividend by 3.86 percentage points. In terms of project attributes, equity REITs fell 1.91% and concession REITs fell 2.67%. In terms of asset types, the industrial park, ecological environment protection, consumer, and warehousing and logistics sectors performed relatively well [3]. 2.2 Liquidity: Increased Trading Volume - The average daily turnover rate of CSI REITs this week was 0.54%, a decrease of 2.13 basis points from last week. The average daily turnover rates of equity/concession REITs were 0.79%/0.54%, an increase of 21.16/5.99 basis points from last week. The trading volumes within the week were 592 million/148 million shares, a week-on-week increase of 37.23%/14.10%. The ecological environment protection sector was the most active [3]. 2.3 Valuation: High Valuation in the Energy Sector - From the perspective of ChinaBond valuation yields, the yields of equity/concession REITs were 3.89%/4.62%. The transportation, warehousing and logistics, and industrial park sectors ranked among the top three [3]. 3. Important Announcements - Multiple REITs released their second-quarter reports this week, including information on revenue, distributable income, occupancy rates, and traffic volumes. For example, Huaxia TBEA New Energy REIT reported electricity sales revenue of 47.5273 million yuan (excluding tax) in the reporting period; Huatai Jiangsu Expressway REIT's toll revenue increased by 17.05% year-on-year, and its average daily natural traffic volume increased by 12.86% year-on-year [31]. - Some REITs released operation data, such as the average daily toll traffic volume and toll revenue of some expressway REITs in June 2025 [32][37]. - Chuangjin Hexin Shounong REIT was listed on the Shanghai Stock Exchange on July 25, 2025 [37].

Core Insights - The iREIT®+HOYA Capital investing group focuses on income-oriented alternatives such as REITs, BDCs, MLPs, and Preferreds, leveraging a team with over 100 years of combined experience [2] - Brad Thomas, a key figure in the group, has extensive real estate investing experience, having been involved in over $1 billion in commercial real estate transactions [3] Group 1 - iREIT® Tracker provides comprehensive data on over 250 tickers, including quality scores and buy/trim targets [1] - The team includes diverse professionals, such as a former hedge fund manager and a military veteran, enhancing the depth of analysis [2] Group 2 - Brad Thomas has been featured in major media outlets like Barron's and Bloomberg, indicating his influence and recognition in the real estate investment community [3]