BOCOM INTL: Stable housing sales momentum in May, bullish on CHINA RES LAND (01109) and others.

BOCOM INTL released a research report stating that it still expects the demand in the secondary market to continue to improve and outperform the primary market. This year, the new housing market will remain relatively stable, and the bank believes that buyers will continue to prefer projects by state-owned enterprises. With the improvement in capital market sentiment, some leading private enterprises may take the opportunity to accelerate their debt restructuring process. In the medium to long term, the bank continues to be optimistic about CHINA RES LAND (01109) and YUEXIU PROPERTY (00123), both rated as "buy". These two companies have shown outstanding sales performance in the past few years, and have stronger execution capabilities in terms of sales. According to preliminary data from CRIC, transactions in core first-tier city projects have driven the total sales volume of the top 100 developers to increase by 14.3% month-on-month to RMB 309.2 billion in May 2026 from RMB 270.6 billion in April. Sales revenue of the 20 major listed developers tracked by the bank increased by 7.5% month-on-month in May, mainly due to a 4.4% increase in sales area and a 0.3% decrease in average sales price. Among the top 10 developers in terms of sales revenue in May, 9 are state-owned enterprises, with Poly Developments and Holdings Group ranking first. According to the National Bureau of Statistics, the price index of new residential buildings in 70 large and medium-sized cities fell by 3.5%/0.1% year-on-year/month-on-month in April, while the price index of second-hand residential buildings fell by 6.2%/0.2% year-on-year/month-on-month. The price index of new/second-hand residential buildings in first-tier cities increased by 0.1%/+0.4% month-on-month. In addition, real estate policies in May continued to lean towards a loose direction. The State Council released the "Fifteenth Five-Year Plan for Urban Renewal", which establishes quantitative targets and action plans for urban renewal work in the next five years; at the same time, it issued the "Implementation Opinions on Providing Basic Public Services in Permanent Residence", providing supporting measures for stabilizing the real estate market in terms of housing security, public services, and land allocation.