November 28, 2025 01:19 AM GMT Hong Kong Property | Asia Pacific M Update HK Residential: Expert Call with Midland: Home Price Upcycle Begins Key Takeaways What's new? - We hosted an expert call with Mr. Gordon Tse, Senior Director, and Mr. Benny Sham, Research Analyst, from Midland (1200.HK, Not Covered), on HK residential. More expert takeaways: (+) Resumption of landbanking - Developers are becoming a bit more active in the land market as premiums were higher than market expectations in recent tenders. ( ...

Core Insights - Japanese real estate developers are increasingly entering the Indian market, attracted by rising rents and the potential of a rapidly growing economy [1] Group 1: Market Dynamics - The Indian real estate market is seen as tricky, yet it presents opportunities for growth due to economic expansion [1] - Rising rents in India are a significant factor driving Japanese developers to invest in the market [1] Group 2: Future Expectations - More Japanese real estate peers are expected to follow suit and explore investment opportunities in India [1]

Core Viewpoint - The report from Guolian Minsheng Securities indicates that the U.S. economy will experience a shift from strong to weak internal momentum in the first half of the year, with potential for a rebound in real estate demand in the second half due to possible interest rate cuts by the Federal Reserve [1][2] Economic Recovery and Real Estate - The U.S. economy is undergoing a K-shaped recovery post-pandemic, with strong performance in high-end manufacturing driven by AI investments, while the real estate sector remains sluggish [2] - The upcoming elections and policies from the Trump administration are expected to focus on real estate, particularly in light of recent Democratic victories in local elections related to housing affordability [2] Interest Rates and Housing Market Dynamics - Historically, interest rate cuts have positively impacted real estate, with effects typically seen within 1 to 2 years for investment and sales, while home prices tend to rise significantly 6 to 18 months after rate cuts begin [2][3] - The current real estate downturn has been prolonged, lasting four years since November 2021, with new home sales showing unexpected resilience despite a significant drop in existing home sales [2][3] Challenges in the Housing Market - The complexity of the current cycle is attributed to both cyclical and structural factors, including high mortgage rates and a lack of new construction since 2008, leading to high prices and limited supply [3][4] - Over 52% of existing mortgage holders have rates below 4%, making them reluctant to sell or buy, which constrains the supply of existing homes [3][4] Housing Supply and Demand Gap - As of 2023, the U.S. faces a housing gap of approximately 4.7 million units, with demand significantly outpacing supply [4] - The anticipated completion of new homes in 2024 is expected to be lower than previous years, exacerbating the supply-demand imbalance [4] Future Outlook - The report suggests that without a recession, significant interest rate cuts are unlikely, as historical data shows limited rate reductions in non-recession years [5][6] - The Trump administration's focus on supply-side reforms and potential introduction of longer-term mortgages could help alleviate current housing market pressures, but this will take time [6][7] - For the upcoming year, supply is expected to improve slightly due to interest rate cuts, but builders remain cautious due to high costs and demand uncertainties [7]

Group 1: China's Property Sector - The property crisis in China has intensified, with Vanke's U.S. dollar bonds crashing 60% to record lows, indicating a severe downturn in the company's financial health [3][9] - Vanke's 2027 dollar bond traded below 44 U.S. cents, the lowest since January, and some onshore bonds fell over 20%, leading to trading suspensions [3][9] - The developer is proposing to delay repayment on a 2 billion yuan (approximately $283 million) onshore note due December 15, raising concerns about Beijing's support for distressed builders [3][9] Group 2: U.S. Economic Indicators - The U.S. labor market shows resilience, with jobless claims falling to their lowest level since August, indicating fewer unemployment benefit filings [4][9] - Americans have experienced 29 consecutive months of real wages outpacing inflation, a significant improvement from the previous 25 months of negative growth [4][9] - This sustained growth in real wages is expected to enhance consumer purchasing power and spending [4][9] Group 3: Japan's Strategic Business Shifts - Japanese companies are reducing reliance on China for manufacturing and sales due to rising diplomatic tensions, shifting focus to alternative markets like Vietnam and India [6][9] - This marks a significant change from the previous trend where Japanese firms were major investors in China's economy [6][9] Group 4: Japan's Cryptocurrency Developments - Japanese asset managers are exploring the development of cryptocurrency investment products, anticipating regulatory reforms that could reclassify digital assets under mainstream securities law by 2026 [7][9] - Firms like SBI Global Asset Management aim to manage approximately ¥5 trillion (about $32 billion) in crypto assets within three years of launch [7][9]

Core Insights - Jaiprakash Gaur's flagship company, Jaiprakash Associates Ltd, has been admitted into insolvency due to overwhelming debt of ₹57,000 crore, marking a significant downfall for the once-prominent entrepreneur [1][2]. Company Background - Jaiprakash Gaur, born in 1931, transitioned from a government job to entrepreneurship in 1958, establishing Jaiprakash Associates and gaining a reputation through major projects like the Tehri Dam and Vishnuprayag Hydel Project [3][4]. - The liberalization of the Indian economy in 1991 allowed Jaiprakash Associates to expand into various sectors, including cement and real estate, with revenues reaching over ₹20,000 crore [5][6]. Growth and Challenges - The company’s rapid growth was fueled by heavy borrowing, relying on future cash flows and asset sales for repayment, which was sustainable during periods of high economic growth [6]. - However, the company faced a downward spiral due to slowing growth, project delays, regulatory issues, and a changing real estate market, leading to significant financial distress [7][8]. Recent Developments - Despite attempts to sell assets to reduce debt, including cement plants and hydropower projects, the financial situation worsened, culminating in insolvency petitions filed by major banks in June 2024 [9]. - The Noida real estate market, which had previously contributed to the company's decline, is now experiencing a boom due to the upcoming Jewar Airport, highlighting a stark contrast to the company's struggles [10]. Leadership Transition - Gaur stepped back from daily operations in 2010, passing leadership to his son, Manoj Gaur, who now faces scrutiny over financial irregularities linked to stalled projects [11]. Conclusion - In October, creditors accepted a bid from Adani Enterprises for Jaiprakash Associates' assets, marking a bitter end to Gaur's legacy as his empire transitions to new ownership [12].

Market Developments - Global markets are experiencing mixed developments, with regional disruptions and significant shifts in key economies and corporate sectors [2] - The Colombo Stock Exchange (CSE) closed early at 12:30 PM on November 28 due to adverse weather conditions, impacting trading activities [9] Indian Financial Landscape - The 10-year Indian benchmark yield increased to 6.5158%, up from 6.5082% [3] - The Indian currency opened weaker at 89.4050 per dollar [3] China's Economic Focus - China is focusing on infrastructure development and corporate financial health, leading to a third consecutive weekly increase in iron ore prices due to strong demand [4] - China is reportedly being approached for $1.5 billion to support Kenya's highway expansion, highlighting its growing role in global infrastructure projects [4] - Concerns are emerging regarding the humanoid robot trend in China, with officials warning about potential bubble risks [4] Corporate News - China Vanke (2202.HK) was downgraded to 'CCC-' by S&P due to concerns over a possible maturity extension, placing its ratings on credit watch negative [5][9] - Coinbase (COIN) reported performance degradation affecting users on its DEX, Borrow, and Lend services [5][9] - Luckin Coffee (LKNCY) donated 10 million yuan for Hong Kong fire relief efforts, demonstrating corporate social responsibility [6] - Cloudbreak (CDL) shares surged following patent approvals in Japan and Europe [6] - BHP Mitsubishi Alliance canceled a major Queensland coal project due to an ongoing royalty dispute [6] Broader Market Sentiment - Broader market sentiment in Asia indicates a struggle to build on recent weekly gains, suggesting a cautious outlook among investors [6]

Market Overview - Bitcoin traded around $90,600 to $91,400, with a recent peak of approximately $91,800, indicating a tight trading range [1] - Global equity markets are on track for their best week since June, driven by expectations of Federal Reserve interest rate cuts [2][5] - Asian equities showed mixed performance, with South Korea and Japan indexes declining while Australia saw slight gains [4] Federal Reserve Expectations - Futures markets indicate an 80% to 85% chance of a quarter-point interest rate cut next month, with expectations for three reductions by the end of 2026 [5] - Recent jobs data and comments from Fed officials have strengthened the case for a potential rate cut in December [7][8] Cryptocurrency Market - US spot Bitcoin ETFs are experiencing slower inflows compared to earlier in the year, but still maintain a positive trend [9] - Current cryptocurrency market cap stands at $3.18 trillion, with Bitcoin at $90,868, Ether at $3,001, and XRP at $2.17, reflecting slight declines [10] China Market Focus - JPMorgan has upgraded its view on the Chinese market to overweight, citing potential upside despite ongoing pressures in the property sector [4]

Group 1 - The core viewpoint of the articles highlights the increasing concentration of the land market in major cities, with significant changes in land transaction amounts and rankings among cities since 2025 [1][2][12] - As of November 27, 2025, the total land transaction amount in Hangzhou reached 152.84 billion yuan, ranking second in the country, only behind Shanghai, which had a total of 235.99 billion yuan [1][4] - The top five cities in land transaction amounts since 2025 include Shanghai, Hangzhou, Beijing, Chengdu, and Nanjing, while traditional leaders like Guangzhou and Shenzhen have dropped out of the top five [2][12] Group 2 - The land market has seen a decline in transaction amounts compared to 2024, but six cities have exceeded 50 billion yuan in transactions, indicating a high concentration of land deals [2][4] - In Beijing, nine residential land plots have been sold with a premium rate exceeding 10%, showcasing strong competition among major enterprises for quality land [5][6] - The overall land supply in Guangzhou has decreased significantly, with a 20% drop in supply area compared to 2024, reflecting a shift in the market dynamics [14][15] Group 3 - The land market's concentration is increasing, with major cities experiencing intensified competition for prime land, particularly in core urban areas [17] - The investment strategy among real estate companies has shifted towards a "better to be selective" approach, focusing on high-quality land in first and second-tier cities [17] - The upcoming land supply in cities like Hangzhou and Beijing is expected to influence the market dynamics, with potential implications for maintaining their respective rankings [11][12]

Summary of Vanke's Conference Call Company Overview - **Company**: Vanke (00002.SZ / 2202.HK) - **Industry**: Real Estate Development - **Founded**: May 1984 - **Positioning**: Largest property developer in China, primarily focused on residential development, with a shift towards the high-end market [14][21] Key Financial Metrics - **Total Debt & Payables**: Rmb500 billion by June 2025, including: - External borrowings: Rmb349 billion - Bank loans: Rmb265 billion (Rmb165 billion secured, Rmb100 billion unsecured) - Borrowings from financial institutions: Rmb41 billion (Rmb28 billion secured, Rmb13 billion unsecured) - Bonds payable: Rmb44 billion (Rmb10 billion offshore senior notes) [2] - **Contracted Sales**: Rmb115 billion in the first 10 months of 2025, down 43% year-over-year [3] - **Land Acquisitions**: Recent purchases in Hangzhou (Rmb1 billion), Wuhan (Rmb349 million), and Chongqing (Rmb321 million) [3] Financial Performance - **Revenue**: Expected to decline from Rmb465.7 billion in 2023 to Rmb343.2 billion in 2024, a decrease of 26% [10] - **Core Profit**: Projected loss of Rmb45.4 billion in 2024, with a core EPS of -Rmb4.01 [10] - **Gross Profit Margin**: Expected to decrease from 14.5% in 2023 to 9.4% in 2024 [10] Market Sentiment and Strategic Outlook - **Investor Sentiment**: Negative short-term sentiment due to bond extension proposal, but long-term impact expected to be limited [4] - **Management Strategy**: Focus on fulfilling delivery and debt obligations, optimizing capital structure, and enhancing management efficiency [15][22] - **Future Plans**: Emphasis on positive cash flow, sales of non-core assets, and lower capital expenditures [15] Valuation and Risks - **Target Price**: - H-shares: HK$5.47, reflecting a 70% discount to estimated NAV of HK$18.22 [16][18] - A-shares: Rmb6.71, reflecting a 60% discount to estimated NAV of Rmb16.76 [23][25] - **Risks**: - Downside risks include slower asset turnover and worse-than-expected margins [19][26] - Upside risks include favorable policy changes and stronger GDP growth [19][26] Additional Insights - **Debt Management**: Vanke is conducting bond extensions without principal cuts, indicating a focus on maintaining liquidity [4] - **Market Position**: Vanke remains a leading brand in the property sector, supported by government and banking institutions [15][16] This summary encapsulates the critical aspects of Vanke's recent conference call, highlighting its financial status, strategic direction, and market outlook.

Core Viewpoint - The new residential project "Hai Chen Yuan Jing" in Haidian District has obtained its pre-sale license, offering a total of 396 units with a starting price of 8.5 million yuan for a three-bedroom unit, making it an attractive option for buyers in the area [1][2][4]. Project Overview - The project consists of 10 buildings, with a total of 414 units planned, and covers an area of approximately 2.4 hectares with a total above-ground construction area of about 50,400 square meters [5][6]. - The average selling price is set at 92,300 yuan per square meter, with unit sizes ranging from 99 square meters to 181 square meters [3][4]. Pricing and Unit Features - The smallest unit starts at 8.5 million yuan, and with promotional offers, a three-bedroom, two-bathroom unit can be acquired for around 800,000 yuan [4]. - The project boasts a high usable area ratio of 87%-93%, providing additional space compared to similar offerings in the market [8]. Architectural Design - The project features a mix of three and four-bedroom units, with innovative designs such as corner windows and generous storage options [9][11][13]. - The luxury 181 square meter unit includes private elevators and expansive living spaces, with a price nearing 98,000 yuan per square meter [15]. Location and Accessibility - Located in the southwestern part of the Siqinqing Town, the project is well-positioned near major roads and the subway, making it accessible while offering a lower entry price compared to other recent developments in Haidian [19]. Developer Information - The project is developed by Beijing Jinglu Yasun Real Estate Development Co., Ltd., which is fully owned by China State Construction Engineering Corporation [21]. - The marketing strategy for the project will be directly managed by the headquarters of China State Construction, led by a seasoned marketing manager with extensive experience in the real estate sector [21].