JP Morgan: Short-term or outperform preferred China Resources Land (01109) and China Resources Mixc (01209).

JP Morgan released a research report stating that property stocks rebounded by 4% yesterday (14th), outperforming the Hang Seng Index by 1% during the same period. This is believed to be driven by the Iceberg Index showing a 36% year-on-year increase in second-hand transactions in major mainland cities in April; in addition, official online signing data shows that trading momentum in major cities (especially Shanghai) is strong, and there is speculation in the market about policy support that may be introduced before the end of April political bureau meeting. However, the bank pointed out that other leading indicators such as selling prices and developers' sales are still weak, and believes that strong growth in second-hand transactions over a few weeks alone is not enough to prove that the industry has bottomed out and rebounded. However, it is not overly pessimistic either. If key indicators such as transaction volume, prices, and inventory can continue to improve sustainably for several months without policy support, the market may reach a turning point. JP Morgan now predicts that the market will stabilize in 2027. After experiencing weeks of poor performance, JP Morgan believes that the Chinese real estate market may outperform the broader market in the short term, mainly due to the strong growth in trading volume in the second-hand market and the strategic timing of the Central Political Bureau meeting of the Communist Party of China at the end of April. The bank's top stock picks are CHINA RES LAND (01109) and CHINA RES MIXC (01209), but it expects higher beta values in state-owned developers such as CHINA OVERSEAS (00688) and CHINA JINMAO (00817), as well as in private developers such as LONGFOR GROUP (00960). In addition, the bank expects that strong second-hand transactions (if sustained) will directly benefit BEKE-W (02423).