Property sales recorded a deeper y-y decline in June as expected, despite improved constructions. We stay cautious on the physical market and expect the weak sales trend to continue in 3Q given worsened resident sentiment, more secondary inventory, and reactive policy. June property sales recorded a wider decline: Rebased national sales were -10.8% y-y in value and 5.5% y-y in volume, widening the 6M25 decline to -5.5% in value and -3.5% in volume y-y. NBS 70-city home prices continued to edge down, -0.3% a ...

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].

Market Overview - A-shares exhibited a mixed performance, with the Shanghai Composite Index falling approximately 1% to below 3500 points, while the ChiNext Index surged over 2% [1] - As of the afternoon close, the Shanghai Composite Index decreased by 0.42% to 3505 points, the Shenzhen Component Index increased by 0.56% to 10744.56 points, and the ChiNext Index rose by 1.73% to 2235.05 points [1] - Total trading volume in the Shanghai, Shenzhen, and North markets reached 163.53 billion yuan, an increase of over 150 billion yuan compared to the previous day [1] AI Industry Chain - Stocks in the AI industry chain rose against the trend, with New Yi Sheng (300502) hitting a 20% limit up, marking a historical high [1] - Other notable performers included Zhongji Xuchuang (300308) with a nearly 17% increase, and Tianfu Communication (300394) rising about 12% [1] - The Nvidia concept stocks also saw significant gains, with China Electric Port (001287) hitting the limit up, and Huajin Technology (603296) and Inspur Information (000977) rising over 7% [1][2] Nvidia Concept Stocks - Nvidia concept stocks experienced a substantial rise, with Zhongji Xuchuang increasing nearly 17%, Shenghong Technology (300476) and Yipinhong (300723) rising over 13%, and Tianfu Communication up about 12% [2] - The Nvidia concept sector overall rose by 2.02%, ranking fifth among industry concept sectors for the day, with a weekly increase of 2.31% [2] - Nvidia announced the resumption of H20 sales to China and the launch of a new GPU compliant with Chinese regulations, which is expected to alleviate the domestic chip shortage [2][3] AI Intelligent Agent Concept - The AI intelligent agent concept also showed strength, with stocks like Dingjie Zhizhi (300378), Chutianlong (003040), and Fanwei Network (603039) hitting the limit up [4] - The AI intelligent agent sector overall rose by 1.05%, ranking eighteenth among industry concept sectors for the day [4] - A new standard for AI intelligent agent operation safety testing was released, addressing risks associated with language barriers and establishing a comprehensive risk analysis framework [4] Real Estate Sector - The real estate sector saw a notable rally, with stocks like Tianbao Infrastructure (000965) and Chongqing Development (000514) hitting the limit up [6] - The Hong Kong real estate sector also experienced a surge, with Meidi Real Estate rising over 60% at one point [6] - Recent government meetings emphasized the need for comfortable and convenient living cities, indicating a potential shift in real estate development strategies [6]

Core Viewpoint - Longfor Group announced that by the end of June 2025, the total contracted sales amount reached RMB 35.01 billion, with a contracted sales area of 2.614 million square meters [1] Group Summary - As of June, the total contracted sales amount for the month was RMB 6.46 billion, with a contracted sales area of 519,000 square meters [1] - The contracted sales amount attributable to the company's shareholders for June was RMB 4.64 billion, with a sales area of 394,000 square meters [1]

Group 1 - The AI computing hardware sector is experiencing significant growth, driven by strong policy support and increasing demand for data centers, with companies like Xinyiseng and Zhongji Xuchuang seeing substantial gains [3] - The real estate sector is showing signs of recovery, particularly in areas related to urban renewal and affordable housing, as local policies become more favorable, although traditional developers are still struggling [3][4] - The overall market is witnessing a divergence, with many stocks declining while a few sectors, particularly AI and real estate with policy backing, are performing well, indicating a selective investment environment [4] Group 2 - The solar, coal, and power sectors are facing challenges, with companies like Yamaton and Dayou Energy experiencing significant declines due to oversupply and strict policy regulations [3][4] - The market is characterized by a concentration of funds in sectors with clear growth logic, suggesting that investors need to be more discerning in their stock selections [4] - The rise in the ChiNext index is primarily driven by heavyweight stocks, while the majority of stocks are declining, highlighting the importance of focusing on industry trends and company fundamentals rather than just index movements [4]

Investment Rating - The report maintains a positive outlook on the Hong Kong property sector, indicating that the sector rating is supported by buying flows rather than solely fundamentals [9][37]. Core Insights - National support is seen as a game changer for Hong Kong, enhancing its position as a financial hub and protecting asset prices [8]. - The property sector represents approximately 5.8% of the Hang Seng Index, with expectations of increased buying flows due to China’s yield compression [9][17]. - Short-term buying flows are expected to benefit high-yield and index stocks, particularly after a pullback in July [9][39]. Summary by Sections I. National Support - National support strengthens Hong Kong's financial hub status, attracting talent and capital, which helps protect asset prices [8]. II. Flow Dynamics - The report highlights that new buying power from China’s yield compression is expected to continue into the second half of the year, with flows outpacing fundamentals in the short term [9]. - Southbound holdings in the Hong Kong property sector increased by 1% in the first half of 2025, reaching 2.4% [9]. - The mutual fund KPI reform in May 2025 is anticipated to drive additional buying flows into the property sector [16]. III. Fundamentals - The residential market is nearing a bottom, with easing oversupply and expectations for a profit upcycle starting in 2027 [51]. - Demand for residential properties is supported by household formation and an influx of new talent, with rent growth indicating underlying demand [51]. - The office market is showing signs of stabilization, particularly in Central, with positive absorption expected [50]. - Retail sales turned positive in May 2025, driven by increased visitation and a weaker Hong Kong dollar [2][50]. - Commercial real estate continues to face challenges, particularly for smaller developers, due to liquidity issues and funding pressures [34][49]. IV. Company Recommendations - Top picks for investment include Swire Properties, Hongkong Land, and Link REIT, with expectations of potential buybacks and stable dividends [39][40].

Investment Rating - The report maintains an "Overweight" rating for specific companies in the property sector, including CR Land, CR Mixc, and Longfor, while identifying distressed names like Sunac as potential outperformers in a speculation-driven rally [1][27]. Core Insights - The property sector experienced a 6% increase on July 10 due to speculation about a potential high-level meeting aimed at reviving the struggling market. However, if no concrete measures are announced, profit-taking is expected [1][4]. - The report highlights a worsening property market, with top 100 developers' sales in June dropping 26% year-on-year, indicating a significant decline compared to previous years [5][17]. - There are rising hopes for new policy support in the coming months, driven by the deteriorating property data, which may lead to tactical buying opportunities, especially during dips [1][5]. Summary by Sections Market Speculation - Speculation about a high-level meeting to support the property sector has emerged, but the accuracy of such reports has historically been low, with only a 40-45% verification rate [4][12]. - The last Central City Work Conference was held in 2015, focusing on urbanization rather than directly boosting the property market [4][14]. Property Market Data - The primary market is showing significant declines, with a 26% year-on-year drop in sales for top developers in June, marking the second worst performance since 2021 [5][17]. - Home prices in tier-1 cities have also declined, with a month-on-month drop of 1.21% in June, mirroring declines seen before previous policy support announcements [5][19]. Potential Policy Directions - The report outlines four levels of potential policy support, with Level 1 and Level 2 being more likely in the near term, focusing on easing home purchase restrictions and expanding inventory purchases [6][7]. - Level 3 and Level 4 policies, which would be more effective but less likely, include calls for home price stabilization and a national stimulus program [8][9]. Company Recommendations - The report identifies CR Land, CR Mixc, and Longfor as fundamental top picks, while suggesting that POE survivors and small-cap SOEs like Jinmao offer the best risk-reward balance [1][27]. - Distressed companies such as Sunac may outperform in a speculation-driven environment, although this performance is likely to be unsustainable [1].

Group 1 - The real estate market in Guangzhou showed steady performance in the first quarter of this year, with a total of 3.55 million square meters of residential net signed area in the first half, representing a 12% year-on-year increase [1] - In July, the market maintained its heat, with the launch of the "Yuexiu·Jiangwan Tide" project, which integrates art, vacation experiences, and daily living, providing residents with a quality "micro-vacation" option [1] Group 2 - The "Jianglan" project is currently promoting high-rise units ranging from approximately 131 to 195 square meters, featuring a constant temperature swimming pool, targeting the luxury market [3] - The project breaks the conventional model of "selling houses before building supporting facilities," offering a fully open VANGUARD CLUB space that includes various functional areas such as a reception hall, private dining room, fitness area, and therapy space [3] Group 3 - The project is located in the prime riverside area of the Pearl River, with convenient transportation access to the newly opened Metro Line 10 and proximity to a 7,000 square meter commercial mall and a 1.7 million square meter riverside park [4] - Educational facilities include the affiliated second primary school of the Haizhu District Foreign Language Experimental School, with enrollment conditions subject to official announcements [4]

Core Insights - The Shenzhen land market witnessed a competitive bidding war for the T201-0232 plot, with China Merchants Shekou winning the bid at a total price of 2.155 billion yuan, reflecting a premium rate of 86.1% [2][3] - The floor price reached 84,180 yuan per square meter, setting a new historical record for residential land in Shenzhen during the current adjustment period of the real estate market [2][4] Summary by Sections - **Land Plot Details** - The T201-0232 plot is located in the core area of Qianhai Guiwan, covering an area of 8,287.15 square meters with a total construction area of 25,600 square meters [3] - The starting price was set at 1.158 billion yuan, with a starting floor price of 45,200 yuan per square meter [3] - **Bidding Process** - The auction involved 12 state-owned enterprises, including major players like China Resources, China Merchants, and Poly, showcasing a "national team" lineup [3] - The bidding process lasted over an hour, culminating in 158 rounds of intense competition, with the final price reaching 2.155 billion yuan [3] - **Market Implications** - The floor price of 84,180 yuan per square meter significantly exceeds the starting floor price of 60,300 yuan per square meter for the highly discussed Shen Chao total land plot, indicating a strong market sentiment [4] - The high premium transaction is expected to positively influence the mindset of existing homeowners in Qianhai and the future pricing of new homes in the Bao'an central area [4]

New World Development missed a self-imposed target to complete an up to $2 billion loan led by Deutsche Bank, sources say, as challenges persist even after the distressed developer closed a major refinancing deal last month https://t.co/9GjNgXLKjt ...