Investment Rating - The report maintains an "Buy" rating for the real estate industry, consistent with the previous rating [2]. Core Insights - The real estate market is showing signs of recovery, with a notable increase in second-hand home subscriptions and a strengthening of transaction confidence [7][15]. - The average daily subscription for second-hand homes in 79 cities reached 3,404 units from January 1 to January 22, 2026, representing a year-on-year increase of 33.1% compared to the same period in 2025 [16][27]. - The report highlights that the market is experiencing a self-driven recovery without significant large-scale stimulus policies being implemented [16]. Summary by Sections 1. Second-Hand Homes: Significant Growth in Subscriptions and Record High Conversion Rates - Overall transactions show a recovery in lower-tier cities, although this has not yet fully translated into net signing [15]. - In key cities, second-hand home subscriptions in first-tier cities like Guangzhou are relatively stable, while many lower-tier cities are experiencing growth [31]. - The conversion rate of visits to transactions has reached a new high, with a 5.6% conversion rate in 70 cities, up from the previous quarter [35]. 2. New Homes: Low Net Signing Levels Across All Tiers - The average daily net signing for new homes in 45 cities was 250,000 square meters, a year-on-year decrease of 42.1% [29]. - All tiers of cities are experiencing varying degrees of decline in new home net signing, with first-tier cities seeing the most significant drops [29]. 3. Price Trends and Market Dynamics - As of January 22, 2026, the average price of second-hand homes in 33 cities has decreased by 17.9% year-on-year compared to 2025 [41]. - The report indicates that the price adjustments in lower-tier cities are more pronounced, aligning closer to residents' psychological expectations, which has led to increased subscriptions [42]. - The report notes a decline in the number of second-hand listings, particularly in key cities, due to factors such as the removal of ineffective listings by agents and homeowners withdrawing listings amid falling prices [41].

Core Viewpoint - The establishment of the temporary grassroots party branch of the Yuzhou Real Estate Agency Association and the Decoration Association marks a new phase of "party building leadership, regulatory collaboration, and self-discipline enhancement" for the real estate and decoration industries in Yuzhou, injecting strong momentum for healthy industry development [1][2] Group 1: Industry Development - The real estate agency and decoration industries serve as crucial bridges connecting the government, market, and the public, directly impacting housing quality, asset security, and the stable operation of the real estate market [1] - The two associations cover nearly 70 member units, including major brokerage firms and decoration companies, with services spanning second-hand housing transactions, rental housing, decoration construction, and building material selection [1] - The rapid development of the industry has raised concerns about issues such as operational standardization, integrity in service, and self-discipline, highlighting shortcomings in party leadership and governance effectiveness [1] Group 2: Initiatives and Actions - The new party branch will focus on integrating party building with industry development through innovative "Party Building +" work models, establishing a dispute resolution mechanism for second-hand housing transactions to curb issues like false listings and price gouging [2] - The Decoration Association will implement "Party Building + Industry Standards" actions, creating quality standards and service process guidelines, and forming volunteer service teams to provide renovation consultation and rights protection guidance in communities [2] - The associations will enhance communication channels between enterprises and the government, as well as between enterprises and the public, to address industry disputes and protect consumer rights, fostering a fair and trustworthy industry environment [2] Group 3: Future Plans - Future initiatives will include expanding "Party Building + Precise Services" and "Party Building + Credit Evaluation" frameworks, establishing credit evaluation and reward-punishment systems to meet industry needs and assist member enterprises [2] - The goal is to promote high-quality development in the real estate agency and decoration industries, contributing to improved public welfare and the construction of a beautiful Yuzhou, thereby supporting high-quality economic and social development [2]

Core Viewpoint - The report from Everbright Securities indicates that due to ongoing pressures in the real estate sector, the profit forecasts for Beike-W (02423) have been revised downwards for 2025-2027, with expected net profits of 3.718 billion, 4.774 billion, and 5.820 billion yuan, representing decreases of 11%, 8%, and 4% respectively. The company, being a leader in real estate brokerage, is expected to benefit from a recovery in the real estate market, with significant growth potential in home decoration and rental sectors, maintaining a "Buy" rating [1]. Group 1: Q3 Performance - In Q3, the company reported revenues, net profits, and Non-GAAP net profits of 23.1 billion, 750 million, and 1.29 billion yuan respectively, showing year-on-year changes of +2.1%, -36.1%, and -27.8% [1]. - The company's revenue growth has been declining throughout the year, with the second-hand housing GTV and revenue for Q3 at 505.6 billion and 6 billion yuan, reflecting year-on-year changes of +5.8% and -3.6% [2]. - The new housing GTV and revenue for Q3 were 196.3 billion and 6.6 billion yuan, showing year-on-year declines of -13.8% and -14.1% [2]. Group 2: Business Segments - The home decoration and rental businesses achieved revenues of 4.3 billion and 5.7 billion yuan in Q3, with year-on-year growth rates of +2.1% and +45.3% respectively [2]. - The profit margin for home decoration was 32.0%, an increase of 0.8 percentage points year-on-year, attributed to improved procurement costs and efficiency [2]. - The rental business achieved a profit margin of 8.7%, up 4.3 percentage points year-on-year, mainly due to improved gross margins in the "Worry-Free Rental" service [2]. Group 3: Financial Metrics - The company's gross margin in Q3 was 21.4%, a decrease of 1.3 percentage points year-on-year, primarily due to a lower proportion of high-margin new housing revenue [3]. - The sales, management, and R&D expense ratios were 7.5%, 8.1%, and 2.8%, showing year-on-year changes of -1.1, -0.3, and +0.3 percentage points respectively [3]. - The Non-GAAP net profit margin for Q3 was 5.6%, down 2.3 percentage points year-on-year, while the company continued to enhance shareholder returns with a buyback amounting to 280 million USD, the highest quarterly buyback in nearly two years [3].

Core Viewpoint - The new housing policy aims to alleviate the difficulties faced by first-time homebuyers, stabilize the real estate market, and promote economic growth in response to a significant decline in housing sales and prices [1][2][3] Policy Background - The introduction of the new housing policy is a necessary measure following a deep adjustment in the real estate market, with national housing sales area down 8.7% and sales revenue down 12.3% in the first half of 2025 [2] - The real estate sector contributes 17.2% to GDP and supports over 40 related industries, highlighting its critical role in the economy [2] Series of Benefits - The new policy includes multiple adjustments to financing, tax, and purchase requirements, aimed at revitalizing the housing market [4] - The minimum down payment for first-time homebuyers has been reduced from 30% to 20%, with some cities allowing as low as 15% [6] - The maximum interest rate for first-time home loans has been set at 3.6%, a reduction of 1.2 percentage points from previous levels [6] - The maximum public housing loan amounts have been increased to 120 million in first-tier cities, 100 million in second-tier cities, and 80 million in third and fourth-tier cities [6] - Some cities have relaxed purchase restrictions, making it easier for new residents to qualify for home purchases [7] - The tax rate for first-time home purchases has been lowered from 1.5% to 1%, and the exemption period for value-added tax on second-hand homes has been reduced from 5 years to 2 years [9] Official Interpretations - The policy defines "first-time homebuyers" as families with no more than one home, aged 22 to 45, with income at or below the local median [10] - The policy will be implemented in phases, starting with 22 cities on July 15, 2025, and expanding to others by October 1 [10] - The application process for the new policy is straightforward, requiring basic documentation such as proof of income and housing status [11] Future Outlook - The real estate market may see a gradual easing of price controls, allowing for a potential 5% price adjustment in certain areas [16] - There will be significant investment in the long-term rental apartment market, providing more housing options for those unable to purchase homes [16] - Policies encouraging elderly housing exchanges, such as "housing for pension," are expected to release approximately 12 million housing units [16] - The trial expansion of real estate taxes is anticipated, targeting families with three or more homes [16]

Core Insights - The real estate industry is entering a critical strategic window as it approaches the end of the 14th Five-Year Plan in 2025, prompting companies to plan for the 15th Five-Year Plan (2026-2030) with a long-term perspective [2][4][5] Group 1: Market Trends - The real estate sales scale is expected to shrink by 40% over the next decade, with sales projected to decline to approximately 8 trillion to 8.5 trillion yuan in 2025 [7] - By 2035, new housing sales area is predicted to decrease by another 40% compared to 2024, resulting in an estimated 5.8 billion square meters [9] - Despite the decline in new housing, the second-hand housing and renovation markets are expected to fill the gap, with the overall real estate market potentially reaching 5.7 trillion yuan by 2035, a 70% increase from 2024 [10][20] Group 2: Developer Landscape - The market share of the top ten developers is projected to rise to nearly 50% by 2035, reflecting a concentration of power among a few key players [12] - The market share of these top developers in first and second-tier cities is expected to double from 30% in 2024 to around 60% by 2035 [14] - Developers are increasingly focusing on first and second-tier cities, with 92.5% of land acquisitions in 2024 concentrated in these areas [15] Group 3: Second-Hand Market Dynamics - By 2035, second-hand housing transactions are expected to account for two-thirds of the total market volume, with sales projected to reach between 8 billion to 9 billion square meters [16] - The increase in second-hand housing sales is significant, as it is anticipated to match the total sales volume of new housing, which is expected to be around 4.5 billion square meters by 2035 [19] Group 4: Renovation Market Growth - The renovation market is expected to nearly double by 2035, driven by increased demand from second-hand housing transactions and improvement needs [22][23] - The overall demand for renovation and second-hand housing is projected to create a market of 5.7 trillion yuan, significantly offsetting the decline in new housing construction [20][21]