Property Data Monitor_ Mainland China_ weekly sales stayed bleak; HK_ Sierra Sea (1st batch) sold out. Mon Apr 28 2025

Summary of the Conference Call Industry Overview - Industry: Real Estate in Mainland China and Hong Kong - Key Focus: Property sales trends, market indicators, and investment opportunities Mainland China Insights - Sales Performance: - 60-city primary sales registrations down 18% year-over-year (Y/Y) but showed a 17% week-over-week (W/W) increase due to month-end effects [4][6] - Compared to the 4-year average, sales improved from -71% to -60%, still weaker than the average decline of 45-55% in Q1 2025 [4][6] - Leading Indicators: - Centaline tier-1 cities' secondary asking price index slightly improved from 21.3 to 21.9, remaining near a 6-month low [4][6] - Centaline manager confidence index dropped from 51.0 to 50.6 [4][6] - Property agency web traffic index decreased by 26% Y/Y and 3% W/W [4][6] - Market Sentiment: - The sector experienced a 3% drop last week, underperforming the Hang Seng Index (HSI) which rose by 3% [4][6] - Suggested strategy: "the worse, the better," indicating potential tactical opportunities [4][6] Hong Kong Market Update - Sales Performance: - The first batch of Sierra Sea (318 units) sold out completely at launch, attributed to low lump sum and attractive pricing [4][6] - Secondary transactions in top 35 estates rose by 4% W/W [4][6] - Secondary home prices increased marginally by 0.01% W/W [4][6] - Market Trends: - HK Property rose by 4% last week, slightly outperforming the HSI [4][6] - Outperformers included Champion REIT and HK Land, both up 14% due to strategic disposals and buyback programs [4][6] - Caution advised on NWD and Wharf REIC, while preference is given to high dividend certainty names like Swire Prop and Link REIT [4][6] Investment Recommendations - Buy on Dips: - Focus on quality state-owned enterprises (SOEs) such as CR Land and CR Mixc, and companies with turnaround stories like Longfor and Jinmao [4][6] - Price Adjustments: - Expectation of a 5% correction in home prices in 2025 due to anticipated market weaknesses [4][6] Additional Insights - Sales Data: - Detailed sales data by tier and region indicates varying performance across different city tiers, with tier-1 cities showing more resilience compared to tier-3/4 cities [4][6] - Future Launches: - Upcoming projects and their expected sell-through rates are critical for gauging market recovery and investor sentiment [4][6] This summary encapsulates the key points from the conference call, highlighting the current state of the real estate market in Mainland China and Hong Kong, along with strategic investment insights.