HK Stock Market Move | Inland property stocks collectively open higher, first-tier cities announce cancellation of standard for non-standard residential units RADIANCE HLDGS (09993) surges by 25%

The collective opening of real estate stocks, as of the time of publication, RADIANCE HLDGS (09993) rose by 25.56% to 4.47 Hong Kong dollars; R&F PROPERTIES (02777) rose by 5.82% to 2 Hong Kong dollars; SUNAC (01918) rose by 4.09% to 2.8 Hong Kong dollars; GREENTOWN CHINA (03900) rose by 3.31% to 9.62 Hong Kong dollars. On the news front, on November 18th, the Shanghai Municipal Housing and Urban-Rural Development Commission and four other departments jointly issued a notice on the cancellation of certain matters related to the standard for ordinary housing, clarifying the cancellation of the standard for ordinary housing and non-ordinary housing, as well as the related personal housing transaction tax matters after the cancellation of the standard. This policy will be implemented from December 1, 2024. Industry experts stated that at the end of September, the "Shanghai Seven Measures" policy was made clear, and in accordance with the national deployment, Shanghai will promptly cancel the standards for ordinary housing and non-ordinary housing to reduce housing transaction costs and better meet residents' demands for improved housing. On the same day, the Beijing Municipal Housing and Urban-Rural Development Commission, Municipal Finance Bureau, and Taxation Bureau jointly issued a notice on the cancellation of certain matters related to the standard for ordinary housing. The notice stated that the city will cancel the standard for ordinary housing and non-ordinary housing. After the cancellation of the standard for ordinary housing and non-ordinary housing, individuals who sell housing to the public after owning it for more than 2 years (including 2 years) will be exempt from value-added tax according to the regulations in the announcement. Individuals who sell housing that they have owned for less than 2 years will be subject to a 5% tax rate and must pay the full amount of value-added tax. CICC believes that Chinese real estate developers are in the early stages of deleveraging, but the period when the physical market experiences the fastest decline in volume and price may have passed. At the same time, policies are beginning to actively promote the stabilization of the industry. For real estate stocks, it is generally believed that the historical valuation bottom has been established, and the focus in the future will be on the pace and space of the upward trend, with the main catalysts being incremental policies and housing price trends. Under the baseline scenario, it is recommended that investors grasp the further upward trend of real estate stocks that may occur in 2025 as the trend of decline in the physical market eases.