CICC: Inner housing enters the policy observation period, bullish on CHINA RES LAND (01109) and others.

CICC released a research report stating that the mainland real estate sector will enter a period of observing the effects of policies. Considering that the fundamental situation of the real estate industry is still in a trend of shrinking volume and declining prices, the comprehensive financial support policies announced on September 24 may bring about a phase of marginal improvement. However, whether they can bring about a turning point in the fundamentals still needs to be observed, as well as whether there will be further efforts in fiscal policy to boost economic growth. Recommended stocks in the development sector include stable stocks such as China Merchants Shekou Industrial Zone Holdings, CHINA RES LAND (01109), and CHINA OVERSEAS (00688); for the service sector, it is advised to position in companies with a better combination of growth and dividend yield in the midst of stock price fluctuations, such as CHINA RES MIXC (01209), GREENTOWN SER (02869), and POLY PPT SER (06049). The report mentioned that on the morning of September 24, the State Council Information Office held a press conference on financial support for high-quality economic development. Regarding real estate-related policies, it proposed: 1) Lowering the interest rates of existing home loans to around the same level as new home loans, with an expected reduction of about 0.5 percentage points, while lowering interest rates may also lead to a decrease of around 0.2 percentage points in the LPR and new home loan rates; 2) Unifying the minimum down payment ratios for first and second homes, with the national level down payment ratio for second homes reduced from 25% to 15%; 3) 300 billion RMB for refinancing affordable housing, with the central bank's funding support ratio increasing from 60% to 100%; 4) Extending the expiry date of two policy documents, namely, operating property loans and the "16 financial measures," originally set to expire at the end of 2024, to the end of 2026; 5) Studying the possibility of allowing policy banks and commercial banks to support conditionally market-oriented acquisitions of land by real estate companies, activating existing land resources, easing the financial pressure on real estate companies, and when necessary, the People's Bank of China may provide policy support.