China Securities Co., Ltd.: Outstanding performance in consumption and rental housing, continuing to be optimistic about REITs assets as core high-quality asset attributes.

China Securities Co., Ltd. released a research report stating that 51 REITs disclosed their fourth quarter reports, with the annual average performance achievement rate exceeding 100%. The sector's performance is divergent, with the best performance seen in consumption and rental housing. The value of their allocation will further highlight by 2025. It is believed that REITs assets continue to be favored as core high-quality assets. It is suggested to select fundamentally stable and improving targets in pro-cyclical sectors, and to position oneself in the counter-cyclical sector after a pullback. Key points from China Securities Co., Ltd. include: - 51 REITs disclosed their fourth quarter reports, with the annual average performance achievement rate exceeding 100%, mainly due to the good performance of rental housing and consumption. - The performances of different sectors are divergent, with consumption and rental housing showing the best performance. Investment recommendations: It is still optimistic about REITs assets as core high-quality assets, and their allocation value will further highlight by 2025. It is suggested to select fundamentally stable and improving targets in pro-cyclical sectors, and to position oneself in the counter-cyclical sector after a pullback. The valuation of pro-cyclical sectors such as industrial parks, warehousing logistics, and highways is relatively low in the current market, with high cost-effectiveness. It is recommended to select high-quality targets with stable and improving fundamentals in these sectors. Risk warning: 1) Risks related to approval and issuance progress not meeting expectations: The approval and issuance of REITs are affected by various factors such as project quality, regulatory review speed, and market environment. If the project maturity is low, regulatory review speed slows down, and the market environment is sluggish, it will slow down the approval and issuance of REITs. 2) Risks related to policy issues falling short of expectations: China's REITs legislation, taxation, and information disclosure systems are still to be established and improved. If relevant policies are not as expected, it may affect the sustainable and healthy development of the REITs market. 3) Risks related to secondary market fluctuations: The risk characteristics of REITs are moderate risk and moderate return. Since this year, the secondary market has experienced continued decline due to the impact of individual assets failing to recover as expected post-epidemic, and the overall REITs market has shown similar investment behaviors.