Summary of Real Estate Market Conference Call Industry Overview - The conference call discusses the real estate market in March 2026, focusing on the performance of the Top 100 real estate companies and the overall market trends [1][2][3][4][5][6][7][8][9][10][11][12]. Key Points Market Performance - In March 2026, the Top 100 real estate companies saw a month-on-month increase in operational amounts by approximately 118%, although year-on-year, there was a decline of 15.1% [1][2]. - The cumulative operational amount for the first quarter of 2026 decreased by 23.8% year-on-year [2]. - The sales performance of the top three companies showed a smaller decline of 6.2% year-on-year, while companies ranked 50 to 100 experienced a decline of only 5.5% [2]. New Housing Market - The new housing market showed signs of weak recovery with a month-on-month increase in transaction area of 89% in March, but a year-on-year decrease of 32% [3]. - The supply of new homes in 50 key cities decreased significantly, with a year-on-year drop of nearly 60%, leading to constrained transaction volumes [3][4]. - The first quarter's cumulative supply saw a year-on-year decline of 42% [3]. Second-Hand Housing Market - The second-hand housing market outperformed the new housing market, with a month-on-month increase of 117% in transaction area and a year-on-year increase of 6% in March [8]. - The overall first quarter saw a 4% year-on-year increase in second-hand housing transactions [8]. - In major cities, second-hand housing transactions accounted for 60% to 70% of total transactions, indicating a shift in buyer preference towards more affordable options [8]. City-Level Analysis - The performance of different city tiers showed significant differentiation. Third and fourth-tier cities experienced a smaller year-on-year decline of 9%, while first-tier cities faced declines exceeding 30% [4]. - Major cities like Beijing, Shanghai, and Shenzhen saw significant drops in transaction volumes, while Guangzhou remained relatively stable [4]. Land Market Trends - The land market showed an increase in transaction scale and amount, with a month-on-month increase of 21% and a year-on-year increase of 2% as of March 25, 2026 [9]. - However, the overall enthusiasm for land auctions has declined, with companies focusing on high-quality land in core cities [9]. Policy Direction - Future policies are expected to focus on "controlling growth, reducing inventory, and optimizing supply," moving away from strong stimulus measures [11][12]. - Specific measures may include reforms to the housing provident fund system and targeted subsidies for first-time buyers and families with multiple children [11][12]. Market Sentiment - Despite weak macro data, there are signs of improved market sentiment, with increased foot traffic in sales offices in cities like Guangzhou and Changsha [6][7]. - The market is expected to stabilize and gradually recover, particularly in the second-hand housing sector, as inventory levels decrease and viewing activity increases [9]. Investment Strategies - Leading real estate companies are focusing their investments on high-quality land in core cities, while also exploring urban renewal projects [12]. - The cautious investment attitude reflects the ongoing market stabilization phase and the competitive landscape in core urban areas [12]. Additional Insights - The differentiation in market performance is not only evident between city tiers but also within projects in the same city, highlighting a significant structural divide [5][6]. - The overall market is expected to continue its bottoming process, with the second quarter of 2026 being a critical observation period for confirming market stability [9].

Summary of Key Points from the Conference Call Industry Overview - The conference call discusses the real estate industry in March 2026, focusing on the performance of the top 100 real estate companies in China, highlighting a cumulative sales decline of 24% compared to the previous year, with major companies like China Overseas and Jinmao showing month-on-month growth [1][2]. Sales Performance - In March 2026, the overall sales performance of the top 100 real estate companies exceeded expectations, with a month-on-month increase of 119% but a year-on-year decline of 15%. The cumulative decline for the first quarter was 24%, a significant improvement from over 30% in previous months [2]. - Major companies such as China Overseas, Jinmao, and others reported substantial month-on-month growth, with China Overseas seeing a 237% increase and Jinmao a 78% increase [2]. Supply and Transaction Data - New housing supply in March 2026 was weak, with a 60% year-on-year decline across 50 cities, while transaction volume increased by 89% month-on-month but decreased by 32% year-on-year [1][3]. - The first quarter saw a 35% year-on-year decline in first-tier cities, with cities like Guangzhou showing resilience due to lower previous year baselines [3]. Market Characteristics - Hot-selling projects in the new housing market are characterized by prime locations and strong product appeal, or by competitive pricing strategies. The overall market price remains under pressure, with developers focusing on volume sales rather than price increases [4]. - The second-hand housing market outperformed the new housing market, with a 117% month-on-month increase in transaction volume, although year-on-year growth was only 6% [5]. Price Trends - In Shanghai, the second-hand market showed signs of recovery for lower-priced "old and broken" properties, while mid to high-end properties continued to face downward price pressure [6][13]. - The overall price trend in the second-hand market remains uncertain, with potential downward pressure from mid to high-end properties affecting the lower segment [6][13]. Land Market Dynamics - The land market showed signs of recovery in March 2026, with increased transaction volumes compared to January and February, but the overall sentiment remains cautious among developers, focusing on profitability and certainty in future sales [7][9]. - Developers are adopting a "better not to acquire than to acquire incorrectly" approach, leading to more conservative bidding strategies [7]. Future Market Predictions - The market is expected to cool down in April 2026, with potential declines in transaction volumes for both new and second-hand properties due to the end of the school district window period and previous demand releases [8][9]. - The likelihood of significant national stimulus policies in the first half of 2026 is low, with a focus on stability rather than aggressive market interventions [14]. Conclusion - The real estate market in March 2026 reflects a complex landscape with significant disparities among companies and market segments. The focus on core locations, product quality, and pricing strategies will be crucial for navigating the ongoing challenges in the industry [10][11].

Investment Rating - The industry investment rating is Neutral (maintained) [4][43]. Core Insights - The Ministry of Housing and Urban-Rural Development released the "Good House" construction guidelines, which aim to standardize housing quality and enhance the management level of housing projects [4][6]. - The report highlights a continued increase in second-hand housing transactions in Beijing and Shanghai, indicating a positive trend in the market [4][6]. - The report suggests monitoring opportunities for sector allocation as policies are expected to evolve positively [4][43]. Summary by Relevant Sections Market Overview - The total transaction area for new and second-hand homes across 15 cities reached 3.903 million square meters this week, with a month-on-month increase of 11.0% but a year-on-year decrease of 13.6% [6]. - Since the beginning of March, the overall transaction area for new and second-hand homes has increased by 96.4% month-on-month, while the year-on-year comparison shows a decline of 14.7% [6]. - Year-to-date, the cumulative transaction area for new and second-hand homes has decreased by 14.6% compared to the previous year, with first, second, and third/fourth-tier cities showing declines of 11.1%, 17.6%, and 13.5% respectively [6]. Key Company Announcements - New City Holdings reported a revenue of 53.01 billion yuan for 2025, a year-on-year decrease of 40.4%, with a net profit of 680 million yuan, down 9.6% [4]. - Chengdu Investment Holdings announced a revenue of 14.46 billion yuan for 2025, an increase of 53.3%, with a net profit of 290 million yuan, up 19.2% [4]. Transaction Data - For the week of March 20-26, 2026, the national new home transaction data showed 22,925 units sold, with a total area of 256 million square meters, reflecting a 19% increase month-on-month but a 31% decrease year-on-year [16]. - In first-tier cities, 4,869 units were sold, with a total area of 53 million square meters, marking a 13% increase month-on-month but a 25% decrease year-on-year [16]. - The second-hand housing market saw 28,831 units sold nationwide, with a total area of 266 million square meters, representing an 8% increase month-on-month and a 3% decrease year-on-year [18].

Investment Rating - The industry investment rating is "Outperform the Market" and is maintained [2] Core Insights - The report highlights a significant increase in transaction activity in Shanghai, particularly in the second-hand housing market, with March 2026 seeing the highest transaction volume in nearly five years, driven by policy incentives. However, new housing recovery remains sluggish, and the overall transaction structure is primarily focused on demand-driven and sustainable segments, which still require validation [4] - Nationally, real estate companies are cautious in their investments, with land transaction volumes remaining low. Land acquisition is concentrated in core cities, with opportunities arising from joint ventures and "commercial-to-residential" conversions. The key variable moving forward will be whether the second-hand market's momentum can translate into new housing sales and price adjustments in April and May [4] Industry Fundamentals Tracking New Housing Transactions and Inventory - In the last week, the new housing transaction area in 30 major cities was 2.2171 million square meters, with a cumulative area of 17.8652 million square meters for the year, reflecting a year-on-year decrease of 17.8%. The average transaction area over the past four weeks was 1.7196 million square meters, down 14.4% year-on-year but up 17.1% month-on-month [5][13] - The average transaction area for first-tier cities over the past four weeks was 490,100 square meters, down 18.4% year-on-year but up 26.1% month-on-month [5][13] - The average transaction area for second-tier cities was 895,700 square meters, down 9.5% year-on-year but up 14% month-on-month [5][13] - The average transaction area for third-tier cities was 338,300 square meters, down 19% year-on-year but up 14.7% month-on-month [5][13] Second-Hand Housing Transactions and Listings - In the last week, the second-hand housing transaction area in 20 cities was 2.746 million square meters, with a cumulative area of 25.5751 million square meters for the year, reflecting a year-on-year decrease of 6.5%. The average transaction area over the past four weeks was 2.4137 million square meters, down 12.2% year-on-year but up 15.4% month-on-month [6][18] - The nationwide second-hand housing listing index as of March 16, 2026, was 3.73, down 21.8% month-on-month, while the listing price index was 144.49, down 0.13% month-on-month [6][22][27] Land Market Transactions - In the last week, 100 major cities saw 23 new residential land supplies and 14 residential land transactions. The average transaction price for residential land was 7,409.5 yuan per square meter, with a premium rate of 2.69%, down 5.78 percentage points month-on-month [24] Market Review - Last week, the A-share real estate index fell by 1.42%, while the CSI 300 index decreased by 1.41%, indicating that the real estate index underperformed the CSI 300 by 0.01 percentage points [30] - The Hong Kong Hang Seng Property Services and Management Index fell by 0.93%, while the Hang Seng Composite Index dropped by 1.24%, with the property services index outperforming the composite index by 0.32 percentage points [30]

Investment Rating - The report rates the real estate industry as "Outperform" [1] Core Viewpoints - New home transaction area increased by 20.4% month-on-month but decreased by 20.4% year-on-year, with the year-on-year decline widening by 5.2 percentage points [7] - Second-hand home transaction area remained stable month-on-month, with a year-on-year decline narrowing [7] - New home inventory area increased both month-on-month and year-on-year, with the absorption cycle also rising [7] - The land market saw an increase in transaction volume but a decrease in price, with the average land price dropping by 24.3% month-on-month and 52.9% year-on-year [7] - Domestic bond issuance by real estate companies increased significantly, with a total issuance of 169.9 billion yuan, up 94.0% month-on-month and 317.8% year-on-year [7] Summary by Sections New Home Market Tracking - In the 13th week, 47 cities recorded new home transactions of 34,000 units, a month-on-month increase of 24.6% and a year-on-year decrease of 14.8% [17] - The new home transaction area was 376.4 million square meters, with a month-on-month increase of 20.4% and a year-on-year decrease of 20.4% [26] - Transaction growth rates for new homes in first, second, and third/fourth-tier cities were 5.7%, 22.7%, and 33.7% respectively month-on-month [19] Second-Hand Home Market Tracking - The second-hand home transaction area in 23 cities was 296.6 million square meters, with a month-on-month increase of 9.6% and a year-on-year decrease of 1.0% [7] - Transaction growth rates for second-hand homes in first, second, and third/fourth-tier cities were 49.7%, 51.2%, and 51.6% respectively month-on-month [21] Land Market Tracking - The total land transaction area in 100 cities was 1,618.8 million square meters, with a month-on-month increase of 39.1% and a year-on-year increase of 20.9% [25] - The total transaction price was 21.1 billion yuan, a month-on-month increase of 5.3% but a year-on-year decrease of 43.0% [25] Policy Overview - The Ministry of Housing and Urban-Rural Development released a draft guideline for "Good Housing," emphasizing safety, comfort, green features, and smart technology [4] Investment Recommendations - The report suggests focusing on three main lines: 1. Companies with stable fundamentals and high market share in core cities, such as China Resources Land and China Jinmao [7] 2. Smaller companies showing significant breakthroughs in sales and land acquisition, like Poly Real Estate Group [7] 3. Commercial real estate companies exploring new consumption scenarios, such as China Resources Vientiane Life and Swire Properties [7]

Investment Rating - The report maintains a "Positive" investment rating for the real estate industry [6] Core Insights - The recent performance of the real estate sector has been weak, influenced by unmet policy expectations and underwhelming sales during the "small spring" season. The market is characterized by price-driven volume increases, with second-hand homes outperforming new homes, and a high proportion of transactions driven by first-time buyers. The structural issues in transaction dynamics indicate that the market's recovery remains under pressure [2] - Positive signals are accumulating in major cities like Shanghai and Beijing, with a notable reduction in supply due to sellers withdrawing listings. The inventory and absorption cycles in these cities have reached healthier levels, suggesting a potential stabilization in housing prices within the next one to two years. Historical data indicates that capital market performance typically leads housing price turning points by 3-6 months, highlighting the importance of monitoring market conditions for investment opportunities [2] - Short-term strategies should focus on defensive value in the financial real estate sector due to declining global risk appetite, while mid-term strategies should target three structural themes: Hong Kong property companies benefiting from market recovery, commercial real estate REITs, and companies with strong product capabilities and profitability [5] Market Performance - The A/H real estate index has underperformed compared to benchmarks, with the A-share real estate index declining by 1.42% [10] - In the second-hand housing market, Shanghai's listing prices have increased for three consecutive weeks, while Guangzhou's prices have turned positive. However, Beijing and Shenzhen continue to see price declines [20][22] - Transaction volumes in Beijing, Guangzhou, Shenzhen, and second-tier cities have decreased week-on-week, with notable declines of 10.8% in Beijing and 12.9% in Shenzhen. Conversely, Shanghai's second-hand home transactions have shown a positive trend, reaching a daily record of 1,585 units [28] Second-hand Housing Weekly Tracking - Listing prices in Shanghai have risen by 0.16% week-on-week, while Guangzhou has seen a 0.06% increase. In contrast, Beijing's prices have dropped by 0.08% and Shenzhen's by 0.08% [20][22] - The listing volumes in Beijing, Shanghai, and Guangzhou continue to decline, with respective week-on-week decreases of 0.12%, 0.33%, and 0.18%. Shenzhen's listings have increased by 0.27% [22][25] New Housing Weekly Tracking - New home sales in Beijing and Shenzhen have increased week-on-week by 47% and 22%, respectively, while Guangzhou has turned positive with a 58% increase. However, Shanghai's new home sales have decreased by 5% [45][46] - The inventory of new homes in first-tier cities has slightly increased by 0.1% week-on-week, indicating a stabilization in the market [47] Financing of Real Estate Companies - The total issuance of new bonds by real estate companies reached 14.444 billion, marking a week-on-week increase of 128.5% [49]

Investment Rating - The report maintains an "Overweight" rating for the real estate industry [4][6] Core Insights - The real estate market is showing positive signals, particularly in core cities, with Shanghai's second-hand housing transactions nearing recent highs. In March 2026, the number of second-hand homes sold in Shanghai, Beijing, and Shenzhen were 27,733, 17,153, and 4,671 respectively, with year-on-year changes of +4.5%, -1.3%, and -17.0% [1][11] - The new housing market in 30 cities recorded a transaction area of 2.277 million square meters this week, a month-on-month increase of 16.1% but a year-on-year decrease of 6.7%. The first-tier cities accounted for 546,000 square meters, with a month-on-month increase of 9.1% and a year-on-year decrease of 10.2% [2][34] - The report emphasizes the importance of observing real estate data over a longer cycle and the transmission chain from second-hand to new housing [1][11] Summary by Sections Second-hand Housing Market - In March 2026, Shanghai's second-hand housing transactions are expected to exceed 30,000 units, with a significant daily transaction peak of 1,585 units on March 28, the highest since 2022 [1][11] - The average daily transaction volumes for Shanghai, Beijing, and Shenzhen are 991, 613, and 167 units respectively [1][11] New Housing Market - The new housing transaction area in first-tier cities was 546,000 square meters, while second-tier cities saw 1.248 million square meters, and third-tier cities recorded 482,000 square meters [2][34] - Cumulative new housing transaction area for the first 12 weeks of the year in 30 cities is 1,538.9 million square meters, reflecting a year-on-year decrease of 29.6% [2][34] Credit Bond Market - A total of 14 credit bonds were issued by real estate companies this week, amounting to 10.301 billion yuan, a decrease of 5.33 billion yuan from the previous week [3][49] - The net financing amount was -4.885 billion yuan, indicating a significant increase in the repayment volume [3][49] Investment Recommendations - The report suggests focusing on real estate-related stocks due to the expected policy support and improving competitive landscape, particularly favoring first-tier and select second-tier cities [4][6]

Investment Rating - Industry investment rating: Real Estate Stronger than the Market (maintained) [2] Core Insights - Recent optimization of public housing fund policies and increased attractiveness of rental-to-sale ratios have led to a rise in the proportion of low-priced second-hand housing transactions in first-tier cities. For instance, in Shanghai, the proportion of second-hand homes priced below 3 million reached over 70% in March 2026, driven by enhanced public fund loan limits and rental yields [3][4] - The report draws parallels with the stabilization of the Hong Kong real estate market, suggesting that similar trends may occur in first-tier cities in mainland China. The focus is on monitoring the sustainability of second-hand housing transactions and the potential narrowing of negotiation space for low-priced homes [3][4] Summary by Sections Market Overview - The report notes a week-on-week increase in transaction volumes, with new home sales in 50 key cities rising by 19% to 23,000 units, while second-hand home sales in 20 key cities increased by 2.9% [3][9] - Inventory levels have decreased, with a total of 88.42 million square meters of inventory across 16 cities, reflecting a 0.91% decline and a 26-month de-stocking cycle [3][12] Capital Market Monitoring - The real estate sector saw a decline of 1.42% this week, underperforming the Shanghai and Shenzhen 300 index, which fell by 1.41%. The current price-to-earnings ratio (TTM) for the real estate sector stands at 68.29, significantly higher than the 13.91 for the broader index, indicating a high valuation relative to historical levels [3][23] - This week, the issuance of domestic real estate bonds totaled 9.23 billion, with a net financing of -5.95 billion, highlighting ongoing liquidity pressures in the sector [3][18] Key Company Insights - Recommended companies include those with strong fundamentals and low historical burdens, such as China Overseas Development and China Resources Land, which are expected to benefit from the stabilization of the housing market [3][5] - Companies with stable cash flow and dividends, such as China Resources Vientiane Life and Poly Property, are also highlighted as attractive investment opportunities [3][5]

Investment Rating - The industry investment rating is maintained as "Buy" [3][8]. Core Insights - In March, second-hand housing transactions in key cities like Beijing and Shanghai showed significant improvement, while new housing transactions remained sluggish [5][6][8]. - In Beijing, the average daily transaction of second-hand homes was 730 units (up 15.1% year-on-year), while new homes saw a decline of 47.4% year-on-year [5]. - In Shanghai, the average daily transaction of second-hand homes was 1,086 units (up 15% year-on-year), with expectations of reaching around 30,000 units for March [6][8]. - Shenzhen experienced a decline in both second-hand and new home transactions, with second-hand homes down 3% year-on-year [6]. - Nationwide, new home transactions showed a clear divergence, with first-tier cities experiencing a significant drop in transaction volume compared to second and third-tier cities [7]. - The report highlights that the increase in second-hand home transactions is partly due to policy stimuli and reflects that some property prices are now at reasonable levels [8]. Summary by Sections Key Cities Performance - Beijing: Second-hand home transactions increased by 3.9% year-on-year, while new homes decreased by 42.3% [5]. - Shanghai: Second-hand home transactions increased by 4.5% year-on-year, while new homes decreased by 8.7% [6]. - Shenzhen: Second-hand home transactions decreased by 1.1% year-on-year, and new homes decreased by 17.2% [6]. National Trends - New home transaction area in 30 major cities decreased by 10.2% year-on-year, with a total transaction area decline of 18.9% for the first three months [7]. - Second-hand home transactions in 13 cities showed a decrease of 1.5% year-on-year, with a cumulative decline of 7% for the first three months [7]. Investment Recommendations - The report suggests focusing on leading real estate companies with land reserves in core cities and high-end improvement products, such as Poly Developments [8]. - It also recommends paying attention to leading intermediary agencies that are likely to see valuation recovery due to the increasing proportion of second-hand home transactions, such as I Love My Home [8].

Core Viewpoint - The real estate market is experiencing a "small spring" in 2026, characterized by a recovery led by first-tier cities, with second-hand housing outperforming new homes, driven by demand from first-time buyers, resulting in increased transaction volumes and stable prices [2]. Group 1: City Differentiation - The recovery shows clear differentiation among cities, with first-tier cities like Beijing and Shanghai leading the way. From the Lunar New Year to now, second-hand home transactions in these cities increased by 28.6% and 36.5% year-on-year, significantly above the national average of 21.9% [3]. - The de-stocking periods for second-hand homes in Beijing and Shanghai have decreased to 8.6 months and 4.1 months, respectively, indicating an improvement in inventory structure [3]. - Despite a 13.5% year-on-year decline in new home sales in January-February 2026, the stabilization in core cities is a leading indicator of market bottom formation [3]. Group 2: Market Activity - The second-hand housing market is significantly more active than the new home market, with Beijing's second-hand home transactions being 2.07 times that of new homes, and Shanghai's being 1.46 times [4]. - In the 11th week, the transaction volume of second-hand homes in 20 key cities increased by 21.97% month-on-month and 13.68% year-on-year, continuing the positive momentum since the holiday [4]. - The approval of new residential listings in 35 cities has seen a year-on-year decline of over 40%, indicating a proactive supply contraction by developers, which helps improve the supply-demand relationship in the new home market [4]. Group 3: Demand Structure - The current market is primarily driven by first-time buyers, with a noticeable increase in market entry willingness. In February 2026, second-hand homes priced below 3 million yuan accounted for 52%, 59%, and 52% of transactions in Beijing, Shanghai, and Shenzhen, respectively [6]. - In Shanghai, nearly 17,000 second-hand homes priced below 3 million yuan were sold in January-February, a year-on-year increase of 25.2%, with the proportion rising to 56.1% [6]. - The concentration of first-time buyers entering the market reflects the direct impact of policy implementation and serves as a solid foundation for market recovery [6]. Group 4: Price and Supply Dynamics - The price trend shows a positive pattern of "stable volume and price, with clear bottom characteristics." In February, second-hand home prices in Beijing and Shanghai increased slightly by 0.3% and 0.2% month-on-month, respectively [7]. - The supply side has also shown significant positive changes, with the growth of second-hand home listings post-holiday being much slower than in previous years, with Beijing and Shanghai seeing increases of only 1.4% and 3.5% [7]. - The narrowing of bargaining space in first-tier cities indicates that seller expectations are stabilizing, transitioning the market from panic selling to rational negotiation, fostering positive interactions between supply and demand [7].