China Property_ Top 100 developers‘ sales weakened in June

Summary of Conference Call Notes Industry Overview: China Property Key Points on Sales Performance - Top 100 developers' contract sales declined by 21% YoY in June 2025, worsening from -10% in May 2025 due to: 1. Higher base in June 2024 from policy easing in mid-May 2024 2. Lack of policy easing support [2][6] - On a MoM basis, contract sales increased by 17%, lower than the average 30% from 2020 to 2024 [2][7] - In the first half of 2025, combined sales for top 100 developers fell by 11% YoY, compared to -8% YoY in May 2025 [2][6] Performance of Luxury Projects - Demand for luxury projects remained strong, exemplified by Sunac's Shanghai One Central Park selling out in 2 hours, significantly boosting Sunac's contract sales in June 2025 [2][6] Regional Developer Performance - Regional developers (e.g., Jinmao, C&D International, Yuexiu Property, Greentown China) outperformed the sector average, focusing on tier 1 and core tier 2 cities, benefiting from resilient luxury demand [2][6] Future Outlook - Expectations for top 100 contract sales to improve YoY in 3Q25 due to a lower base effect [2][6] Secondary Market Insights - As of June 25, 2025, secondary listings in 50 cities increased by 9.5% YoY and 8.6% YTD; Tier-1 cities saw a 4.4% YoY and 5.3% YTD increase [3][9] - Secondary transaction volume for 12 cities increased by 4% YoY on a 30-day moving average, down from 7% in May 2025 [3][9] Implications for Property Listings - The rise in secondary listings is attributed to: 1. Slowing secondary transactions 2. Upgraders selling existing homes to purchase luxury new homes [3][9] Developer Performance Comparison - SOE developers' contract sales in June declined by 23% YoY, similar to the 21% YoY decline of top 100 developers; semi-SOE and POE developers saw declines of 33% and 11% respectively [4][25] - Current market shares: SOE developers at 58%, POE developers at 31% [4][25] Sales Data Highlights - Top 100 developers' combined gross contract sales value dropped by 21% YoY in June, compared to -10% YoY in May [18][20] - The combined attributable contract sales GFA decreased by 35% YoY in June, worsening from -20% YoY in May [13][20] Risks and Opportunities Downside Risks - Government policies restricting demand and mortgage lending - Tight financing conditions for developers - Lower-than-expected residential growth in China's economy [31] Upside Risks - Potential policy loosening that could boost residential property sales and prices - Large-scale asset disposals at fair prices by developers to ease liquidity pressures [31]