Essence of Securities Morning Meeting | Historical bottom of real estate stocks' valuation may have been established

The market surged yesterday and then fell back, with the ChiNext Index leading the decline for the third consecutive day, falling by over 9% in the past three trading days. Over 4100 stocks in the entire market fell, with over 200 stocks falling by over 9%. The total trading volume of the Shanghai and Shenzhen stock markets was 1.76 trillion yuan for the entire day, a decrease of 68.8 billion yuan from the previous trading day. On the sector side, sectors such as graphite electrodes, banks, steel, and real estate led the gains, while sectors such as intelligent AI, software development, gaming, and Hongmeng concept led the declines. At the close of trading yesterday, the Shanghai Composite Index fell by 0.21%, the Shenzhen Component Index fell by 1.91%, and the ChiNext Index fell by 2.35%. At today's brokerage morning meeting, China Securities Co., Ltd. suggested focusing on the steel, photovoltaic, cement, coal, and rare earth industries for supply-side optimization, while CICC believes that the historical bottom of the valuation of real estate stocks may have been established. China Securities Co., Ltd.: Supply-side optimization, focus on steel, photovoltaic, cement, coal, and rare earth industries China Securities Co., Ltd. pointed out that supply-side reforms emphasize optimizing the macroeconomic level through eliminating inefficient capacity, promoting optimal allocation of resources, and accelerating industrial upgrading to achieve high-quality economic development. The reform involves deep adjustments to excess capacity and inefficient production in various industries, not only steadily improving the supply-demand structure, but also cultivating new growth drivers through guiding the application of new technologies and green transformation, providing significant valuation repair and profit improvement space for leading companies in the relevant industries. The comprehensive effects of the reform are reflected in the improvement of industrial efficiency, the optimization of market competition, and the return of investment value in the capital market. Supply-side optimization, suggesting a focus on the steel, photovoltaic, cement, coal, and rare earth industries. CICC: Historical bottom of real estate stock valuation may have been established CICC believes that currently, Chinese real estate developers are in the early to middle stages of deleveraging. However, the period when the real estate market is experiencing the fastest decline in volume and price may have passed, and policy measures are now actively promoting industry stabilization. For real estate stocks, CICC generally believes that the historical bottom of valuation may have been established, and the main focus in the future will be on the pace and space of the uptrend, with the main catalysts being incremental policies and trends in housing prices. Under the baseline scenario, it is recommended that investors seize the further upward trend of real estate stocks that may occur due to the moderation of the downward trend in the real estate market by 2025. This article is reprinted from "Cailian News". Editor: Li Fo.