Hong Kong Stock Concept Tracking | New Housing Market Policies Released in Multiple Locations, Institutions Optimistic about the Bottom Valuation Repair of Chinese Real Estate Sector (Including Concept Stocks)

Recently, various local governments have been intensively introducing policies related to the real estate sector. Cities such as Beijing, Shanghai, Chengdu, and Xi'an have all released favorable policies before September. "By adjusting purchasing restrictions and mortgage down payment ratios, various regions have further unleashed the potential for home buying. At the same time, local governments have increased the ceiling for housing provident fund loans, lowering the threshold for home buying and reducing costs through multiple subsidies, including interest subsidies on housing provident fund loans and subsidies for buying new homes after selling old ones," said Li Yujia, chief researcher at the Guangdong Provincial Housing Policy Research Center. In terms of the pace of policy introduction, after Beijing and Shanghai rolled out policies in succession, cities like Chengdu and Xi'an followed suit, creating a relay effect among first-tier and second-tier cities, continuously conveying a positive signal to the market that "there is still room for policies," thus boosting market confidence and expectations. The timing for releasing favorable policies in various regions is precise, aiming to energize the traditional peak season of the real estate market in "golden September and silver October." Guosen Securities recently released a research report stating that the real estate industry is still in a state of weak recovery in sales and supply contraction in the first half of the year. However, the overall policy environment is relaxed, the processes of controlling increments and reducing inventory are accelerating, and the performance of quality real estate companies is continually improving. Recommended targets include: (1) high-quality real estate firms with solid city fundamentals and strong product capabilities; (2) commercial property operators that balance commercial operations and asset management, benefiting from both the recovery of real estate and consumption stimulus policies; (3) high-quality property management companies that excel in service quality under the "good houses, good services" policy. Guosen also stated that the marginal improvement in real estate sales volume and prices in July is continuing to accumulate upward momentum for real estate stocks. Considering that the current discount rate on real estate stocks has fully or even overly pessimistically priced in future declines in housing prices, we reaffirm that real estate stocks have value potential and that their prices are at a mid-term bottom. It is advisable to preferentially select targets that are actively acquiring land, have reasonable layouts, and are sufficiently discounted. Relevant Hong Kong stocks in the real estate sector include: CHINA OVERSEAS(00688), China Resources Land(01109), Jianfa International(01908), YUEXIU PROPERTY(00123), SEAZEN(01030), CHINA VANKE(02202), LONGFOR GROUP(00960), among others.