Valuation Summary - The overall valuation of A-shares as of March 20, 2026, shows the CSI All Share (excluding ST) PE at 21.7x and PB at 1.8x, positioned at the historical 81st and 43rd percentiles respectively [2] - The Shanghai Stock Exchange 50 PE is at 11.4x and PB at 1.3x, at the historical 57th and 34th percentiles [2] - The CSI 300 PE is at 14.0x and PB at 1.5x, at the historical 62nd and 36th percentiles [2] - The CSI 500 PE is at 35.1x and PB at 2.4x, at the historical 67th and 56th percentiles [2] - The ChiNext Index PE is at 41.2x and PB at 5.6x, at the historical 36th and 64th percentiles [2] Industry Valuation Comparison - Industries with PE valuations above the historical 85th percentile include Real Estate, Automation Equipment, Retail, IT Services, and Communication [2] - Industries with PB valuations above the historical 85th percentile include Electronics (Semiconductors) and Communication [2] - Industries with both PE and PB valuations below the historical 15th percentile include Securities, Food and Beverage, Medical Services, and White Goods [2] Industry Midstream Sentiment Tracking New Energy - In the photovoltaic sector, polysilicon futures prices fell by 11.8%, and spot prices dropped by 3.2%, indicating cautious demand from downstream [3] - Battery material prices, including lithium, have seen significant declines, with lithium carbonate down 3.9% [3] Technology TMT - The Philadelphia Semiconductor Index rose by 0.3%, while the Taiwan Semiconductor Index fell by 0.4% [3] - The DRAM price index increased by 4.1%, indicating a positive trend in semiconductor pricing [3] Real Estate Chain - The national average price of rebar fell by 0.4%, while cement prices increased by 1.3% as construction activity picks up [3] - Real estate sales area decreased by 13.5% year-on-year in January-February 2026, indicating ongoing challenges in the sector [3] Consumer Sector - The average price of live pigs fell by 1.8%, prompting government intervention to stabilize prices [3] - Retail sales grew by 2.8% year-on-year in January-February 2026, showing signs of recovery in consumer confidence [3] Midstream Manufacturing - Manufacturing investment grew by 3.1% year-on-year in January-February 2026, reflecting improved cash flow and external demand [3] - Industrial electricity consumption increased by 6.1% year-on-year, driven by higher manufacturing output [3] Cyclical Industries - Concerns over global economic stagnation have led to significant declines in metal prices, with COMEX gold down 10.6% and copper down 7.1% [3] - Brent crude oil prices rose by 0.5% to $104.41 per barrel, influenced by geopolitical tensions affecting supply [3]

Investment Rating - The report maintains a "Recommended" rating for the industry, indicating a positive outlook for the sector's fundamentals and expectations for the industry index to outperform the benchmark index [8]. Core Insights - The report highlights that the sales decline in new homes has narrowed, while the decline in second-hand homes has expanded, with both categories experiencing low levels compared to the same period in the past five years [9][14]. - The liquidity outlook for March 2026 suggests an increase in macro-level liquidity, with a reduction in tightening measures compared to the previous year [49]. - The report notes a rise in the unsold inventory cycle for new homes in February compared to January, indicating a potential challenge in inventory management [32]. Industry Scale - The industry comprises 257 listed companies, with a total market capitalization of 2,966.1 billion and a circulating market capitalization of 2,812.4 billion [1]. Industry Index Performance - The absolute performance of the industry index shows a decline of 6.7% over one month, 4.1% over six months, but a positive increase of 7.6% over twelve months [2]. New Home and Second-Hand Home Transactions - As of March 19, 2026, the year-on-year decline in new home transaction area is reported at -13%, while the second-hand home transaction area shows a decline of -15% [4][5]. - The average number of viewings for second-hand homes in 12 sample cities has turned negative, indicating a significant drop in buyer interest [43]. Land Acquisition Trends - In January-February 2026, the area of land transactions decreased by 30% year-on-year, while the average transaction price saw a smaller decline of 21% [20]. - The report indicates a decrease in the number of unsold new homes in first and second-tier cities, while third and fourth-tier cities saw an increase in unsold inventory [35].

Core Viewpoint - The rise of the US 10-year Treasury yield to 4.37% signifies the end of the era of cheap capital, fundamentally altering the investment landscape and asset pricing dynamics [1][3][14]. Group 1: Impact of Rising Yields - The bond market serves as a reliable indicator of macroeconomic conditions, reflecting true pricing of inflation expectations and capital supply and demand [3][4]. - The increase in the risk-free rate has reset the valuation framework for all assets, leading to a systematic re-evaluation of risk premiums [6][10]. - High-leverage industries, such as real estate and technology, are particularly vulnerable as rising financing costs threaten their operational viability [9][10]. Group 2: Shifts in Investment Behavior - Investors are now compelled to reassess whether the risks they are taking are justified, leading to a preference for safer, cash-generating assets [7][12]. - There is a noticeable shift in asset allocation, with institutional investors increasing bond holdings while reducing equity risk exposure [7][11]. - Cash flow-generating assets, such as those in the energy and financial sectors, are becoming more attractive in a high-interest environment [11][12]. Group 3: Market Dynamics and Valuation - The market is transitioning from a focus on growth narratives to an emphasis on current cash flows and profitability, marking a return to traditional valuation metrics [12][16]. - The disparity in market expectations is evident, with some investors betting on a return to lower rates while others prepare for prolonged high rates, increasing market volatility [13][14]. - The strong dollar and rising US Treasury yields are drawing capital back to the US, creating pressure on emerging markets and potentially leading to sovereign debt crises [13][14]. Group 4: Long-term Implications - The end of the cheap capital era necessitates a focus on asset quality and cash flow generation, as only those assets with real earning potential will thrive in the new environment [14][16]. - The current market conditions highlight the risks of relying on outdated investment strategies, emphasizing the need for adaptability and a return to fundamental analysis [16].

Investment Rating - The report maintains an "Overweight" rating for the real estate industry [1][4]. Core Insights - The report indicates a recovery in transaction volumes for the week of March 13 to March 19, 2026, with a stable policy environment and increasing external uncertainties, suggesting that policy support will continue throughout the year [2][4]. - The new development model is expected to drive healthy market growth, contributing to a gradual stabilization of the market [4]. Summary by Sections Transaction Data - In the 12th week of 2026, the total new home transaction area in 30 major cities reached 1.76 million square meters, a 14.5% increase from the previous week, but an 8.86% decrease year-on-year compared to the same week in 2025 [4]. - First-tier cities recorded a sales area of 470,000 square meters, down 3.5% week-on-week and down 23% year-on-year [4]. - Second-tier cities saw a sales area of 930,000 square meters, up 33.6% week-on-week and up 3% year-on-year [4]. - Third-tier cities had a sales area of 360,000 square meters, a slight increase of 1.64% week-on-week but a 14.7% decrease year-on-year [4]. Cumulative Transaction Data - From March 1 to March 19, 2026, the cumulative transaction area in 30 cities was 4.01 million square meters, a 56.96% increase from February but an 8.3% decrease year-on-year [4]. - First-tier cities had a cumulative transaction area of 1.16 million square meters, a 68% increase from February but a 17% decrease year-on-year [4]. - Second-tier cities recorded 2.01 million square meters, a 69% increase from February and a slight increase of 0.47% year-on-year [4]. - Third-tier cities had a cumulative area of 840,000 square meters, a 24.5% increase from February but a 14.1% decrease year-on-year [4]. Land Transaction Data - For the week of March 9 to March 15, 2026, land supply was 11.78 million square meters, with land transaction area at 11.09 million square meters, resulting in a supply-to-sales ratio of 1.06 [4]. - The total land transfer amount was 23.1 billion yuan, with a cumulative land supply area of 149.94 million square meters for the year, down 1.1% year-on-year [4]. - The cumulative land transaction area was 152.61 million square meters, down 9.5% year-on-year, while the cumulative land transfer amount was 381.3 billion yuan, down 26.99% year-on-year [4]. Inventory and Market Dynamics - The inventory clearance cycle in 35 cities increased to 27.19 months, up 2.47% from the previous month and down from 32.1% year-on-year [4]. - The available housing area in February 2026 was 31.25 million square meters, a slight decrease of 0.26% month-on-month and 0.88% year-on-year [4].

Economic Data - In January-February, major economic indicators showed recovery, with industrial added value increasing by 6.3% year-on-year, up from 5.2% in the previous period [4] - Retail sales also improved, with a year-on-year growth of 2.8% in January-February, compared to 0.9% previously [4] - Fixed asset investment saw a year-on-year increase of 1.8%, a significant recovery from a decline of 3.8% in the previous period [4] Market Performance - Global equity markets mostly adjusted, with oil prices leading gains and gold and silver under pressure [5][9] - The S&P 500 and other major U.S. indices fell by 1%-3%, while the A-share market also saw a broad adjustment, with the small-cap index declining by 7.1% [2][5] - The communication sector led gains in the A-share market with a rise of 2.1%, while sectors like non-ferrous metals and chemicals saw declines exceeding 10% [9][10] Policy and Strategy - The report highlights the ongoing geopolitical tensions, particularly the U.S.-Iran conflict, which is impacting global energy supply and inflation expectations [2][3] - The Federal Reserve has maintained a cautious stance, indicating that interest rate cuts will be conservative, with only one expected in 2026-2027 [2][3] - Domestic policies are focusing on financial strength and green energy transition, with initiatives to promote hydrogen energy and energy-efficient equipment [3] Investment Opportunities - The report suggests that in the medium to long term, Chinese assets may benefit from their safe-haven attributes, particularly in sectors supported by policy and with clear growth prospects, such as energy, advanced manufacturing, and hard technology [3] - Attention is drawn to cyclical sectors benefiting from commodity price increases and strategic security needs, as well as advanced manufacturing sectors poised to benefit from global restocking [3]

Group 1 - The report indicates that in the short term, global risk assessment is rising, risk-free interest rates are increasing, risk appetite is declining, and profit expectations are being revised downwards, posing significant challenges to global capital markets. However, the domestic equity market is less affected by geopolitical risks, showing a decreasing risk assessment and a shift in risk appetite towards the middle [4][7]. - In the medium term, with rising global risk assessments and declining domestic risk assessments, the report constructs an "efficiency-safety" two-dimensional analysis framework to identify which industries will continue to benefit [4][7]. - The report finds that the reason for the decreasing negative impact of geopolitical risks on the A-share market is not due to policy funding effects or cheap valuations, but rather the contribution of high safety importance industries [4][7]. Group 2 - Since 2026, the efficiency line has weakened while the safety line has strengthened, indicating a shift in market dynamics [8][12]. - The strengthening of the safety line is primarily driven by valuation rather than performance, with geopolitical disturbances acting as a significant catalyst for this trend [8][19]. - The intersection of energy security and technology style switching highlights a strong outlook for photovoltaic equipment, suggesting a focus on global energy security and stable industries like electric and mechanical equipment [29][31].

Domestic Developments - The "14th Five-Year Plan" focuses on modern marine industries, with significant fiscal measures boosting domestic demand, as highlighted in a key article published on March 16[8] - The State Council identified six key areas for economic recovery, with early economic data confirming the effectiveness of these decisions, including a 4.5% year-on-year increase in interprovincial trade sales in 2025[11] - Financial regulatory authorities emphasized risk prevention and high-quality development, with four main tasks outlined for the year, including a focus on real estate financing reforms[12] International Developments - Ongoing geopolitical tensions in the Middle East have escalated, with U.S. and Israeli military actions against Iran leading to significant disruptions in the Strait of Hormuz, affecting global oil supply[16] - The U.S. Federal Reserve maintained interest rates in the 3.5%-3.75% range, with inflation concerns delaying any potential rate cuts, as February PPI rose 3.4% year-on-year, exceeding expectations[20] - The European Central Bank also kept rates unchanged but indicated readiness to act if inflation risks from the Middle East conflict escalate further[18] Market Data - Brent crude oil prices increased by 13.73% week-on-week, reaching an average of $111.01 per barrel, while iron ore prices rose by 2.25%[24] - Real estate sales saw a significant week-on-week increase of 17.01%, indicating a rebound in the sector[4] - The DXI index for storage DRAM prices rose by 3.33% week-on-week, reflecting upward trends in the midstream sector[33]

Core Insights - The article emphasizes the ongoing trend of talent migration towards major cities and metropolitan areas in China, highlighting the importance of population and talent as fundamental resources for economic activities [2][4]. Data Overview - Zhilian Recruitment has over 374 million workplace users, with approximately 80% holding a college degree or higher, significantly exceeding the national employment population average of 22.1%. Among job seekers, about 25% are cross-city job seekers [2][8]. Talent Characteristics in 2024 - Gender: 61% of mobile talent are male, higher than the overall job seeker demographic of 56% [3][10]. - Age: 67% of mobile talent are aged 18-30, compared to 61% of the overall job seeker population, indicating younger individuals are more likely to seek cross-city employment [3][10]. - Education: 54% of mobile talent hold a bachelor's degree or higher, surpassing the overall job seeker average of 47% [3][12]. - Industry: 55% of mobile talent are concentrated in IT, real estate, and manufacturing, with a slight decrease of 0.5 percentage points from 2023 [3][14]. Talent Attraction Rankings - The top three cities for talent attraction in 2024 remain unchanged: Beijing, Shanghai, and Shenzhen. The top ten cities include Guangzhou, Hangzhou, Chengdu, Nanjing, Suzhou, Wuhan, and Wuxi [4][18]. - The eastern region continues to attract talent, while central, western, and northeastern regions experience net outflows [4][22]. Key City Insights - In first-tier cities, talent net inflow ratios for Beijing, Shanghai, and Guangzhou have slightly decreased, while Shenzhen remains stable. The net inflow ratios are 0.4%, 1.3%, 1.2%, and 0.8% respectively [5][33]. - In second-tier cities, Hangzhou leads with a net inflow ratio of 1.3%, followed by Chengdu, Nanjing, Suzhou, Wuhan, and Wuxi [6][69]. Regional Talent Flow Trends - The eastern region's net inflow ratio has decreased for two consecutive years, while the western and northeastern regions have seen slight recoveries. The net inflow ratios for the eastern, central, western, and northeastern regions are 13.4%, -6.5%, -4.0%, and -2.6% respectively [22][23]. - Talent flow towards the five major city clusters remains significant, with 60% of talent moving towards these areas, particularly in the Yangtze River Delta and Pearl River Delta [27][28].

1. Report Industry Investment Rating No relevant content provided. 2. Core Viewpoints of the Report - The Shanghai real - estate policy relaxation on February 25, 2026, has effectively activated demand, with the second - hand housing transaction volume increasing and the transaction area exceeding that of the previous three rounds of policy stimuli. However, the market remains cold overall during the "Golden March and Silver April" period, and there may be a callback after the sales peak due to "peak season overdraft" [1][2][3][6]. 3. Summary by Related Catalogs 3.1 Shanghai New Policy Effect Observation - **Longitudinal Comparison of Shanghai's Historical Data**: From February 26 to March 19, 2026, the second - hand housing transaction data showed a 5% decline compared to the same period in 2025 but a 42% significant increase compared to 2024. The weekly transaction area has been increasing, with a 14% week - on - week growth in the latest week and 33% in the previous week. Compared with the same lunar period last year, Shanghai's sales from the 25th day of the first lunar month to the first day of the second lunar month increased by 10%, while Beijing and Shenzhen had a 1% decline and 2% increase respectively [1]. - **Comparison of Four Rounds of Policy Stimuli since 2024**: After the February 2026 policy, the third - week average daily transaction area reached 83,000 square meters, higher than the 74,000 - 79,000 square meters in the third week of the two 2024 policies, about 5% - 12% better. After excluding the Spring Festival impact, the average daily transaction area in the third week increased by 50% compared to the week before the policy, basically the same as in May 2024 (49%) and lower than in September 2024 (55%). Compared with two weeks before the policy, the average daily transaction area increased by 29%, lower than the two 2024 rounds (133% and 48%) [2]. - **Comparison with Beijing and Shenzhen without Policy**: Comparing February 26 - March 19, 2026, with February 7 - 28, 2025 (both 22 days after the Spring Festival), Shanghai's transaction volume increased by 20% year - on - year, while Beijing and Shenzhen had 4% and - 4% year - on - year changes respectively [2]. - **Sustained Heat Concerns**: After the policy in 2024, the weekly transaction volume reached its peak after 4 and 10 weeks of fluctuating growth respectively, and then declined. This time, after the policy was introduced during the "Golden March and Silver April" sales peak, there may be a callback due to "peak season overdraft" [3]. 3.2 Housing Price Observation - From March 9 - 13, the second - hand housing listing prices in first - tier cities were divided. Shanghai's prices increased by 0.1% week - on - week, while Beijing and Shenzhen decreased by 0.2% and 0.1% respectively. Second - and third - tier cities also saw a 0.1% decline. Compared with the end of 2025, after rising and then falling, the second - hand housing listing prices in all cities decreased by 1% - 3%, with first - tier cities down 1.8%, second - tier cities down 2.9%, and third - tier cities down 1.5% [4]. 3.3 Monthly Trend - Although it is the "Golden March and Silver April" period, the overall market remains cold. From March 1 - 19, the second - hand housing transaction area decreased by 12% year - on - year, with a larger decline than in January - February. New housing continued the downward trend from January - February, with a 12% decline from March 1 - 19 [6]. - In terms of structure, from March 1 - 19, most cities' second - hand housing transaction areas decreased year - on - year, with relatively high declines in Shenzhen, Hangzhou, Suzhou, and Dalian. In the new housing market, Shanghai, Wuhan, and Xiamen's transaction areas increased year - on - year, while Shenzhen and some second - and third - tier cities had large declines [6].

1. Report Industry Investment Rating No information provided in the given content. 2. Core Viewpoints of the Report - This week, the external market environment fluctuated sharply. REITs first rose and then fell, similar to the bond market trend. The warehousing sector declined significantly due to short - term negative news. The primary market welcomed the first new product issuance in 2026, and the Dongfanghong Tunnel Expressway REIT released an inquiry announcement. Tianhong Consumer REIT withdrew its application, and Xinghe Commercial Real Estate REIT was accepted. Some high - speed REITs disclosed February operating data, with most showing significant growth in traffic volume [3]. - As of March 20, 2026, 20 REITs have been successfully issued since 2025. This week, 8 first - issue public REITs and 1 expansion - offering REIT made new progress. The current approval process includes 32 first - issue and 4 expansion - offering REITs at different stages [3]. - This week, the CSI REITs Total Return Index closed at 1021.78 points, down 0.13%, outperforming the CSI 300 by 2.05 percentage points and the CSI Dividend by 2.92 percentage points. Property - type REITs fell 0.33%, while franchise - type REITs rose 0.41%. In terms of asset types, the affordable housing, transportation, data center, and environmental protection and water services sectors performed well [3]. - In terms of liquidity, the average daily turnover rates of property - type and franchise - type REITs decreased, and the trading volumes also declined week - on - week. The data center sector was the most active [3]. - In terms of valuation, the yields of property - type and franchise - type REITs from ChinaBond valuation are 4.02% and 4.87% respectively, with the transportation, warehousing and logistics, and park sectors ranking among the top [3]. 3. Summary According to the Directory 3.1 Primary Market: 8 First - Issue Public REITs Made New Progress - Since 2025, 20 REITs have been successfully issued, with a total issuance scale of 40.3 billion yuan. This week, 8 first - issue public REITs made new progress, including the withdrawal of Zhonghang Tianhong Consumer REIT, feedback on several REITs, and the acceptance and registration of others. One expansion - offering REIT, CICC Xiamen Anju REIT, was registered and became effective [3][15][16]. 3.2 Secondary Market: Liquidity Decreased This Week 3.2.1 Market Review: The CSI REITs Total Return Index Fell 0.13% - The CSI REITs Total Return Index closed at 1021.78 points, down 0.13%, outperforming the CSI 300 by 2.05 percentage points and the CSI Dividend by 2.92 percentage points. Property - type REITs fell 0.33%, and franchise - type REITs rose 0.41%. In terms of asset types, the affordable housing (+0.98%), transportation (+0.67%), data center (+0.10%), and environmental protection and water services (-0.05%) sectors performed well [3]. 3.2.2 Liquidity: Both Turnover Rate and Trading Volume Decreased - The average daily turnover rates of property - type and franchise - type REITs were 0.31% and 0.28% respectively, down 5.05 and 7.36 basis points from last week. The trading volumes were 333 million and 94 million shares respectively, down 14.15% and 20.81% week - on - week. The data center sector was the most active [3][27]. 3.2.3 Valuation: The Affordable Housing Sector Had a Higher Valuation - The yields of property - type and franchise - type REITs from ChinaBond valuation were 4.02% and 4.87% respectively. The transportation (5.97%), warehousing and logistics (5.72%), and park (4.84%) sectors ranked among the top [3][29]. 3.3 This Week's News and Important Announcements - **News**: During the Two Sessions, a representative proposed to include REITs in the inter - connectivity to activate the Hong Kong REITs market. Guangdong Hongchuan Smart Logistics plans to issue a REIT with its infrastructure assets. Jinan Urban Development Group's rental housing REIT service procurement project is open for bidding. Shaanxi's Huashan Scenic Area REIT is about to be issued [35]. - **Announcements**: Several high - speed REITs disclosed February operating data, including traffic volume and toll revenue. Some REITs also issued解禁 announcements [36].