HK Stock Market Move | Chinese property stocks collectively surged as transactions of second-hand homes in core cities warmed up in August. Policy efforts are expected to accelerate the industry's concentration.

The shares of domestic property companies have collectively surged. As of the time of writing, YUEXIU PROPERTY (00123) rose by 5.65% to HKD 3.18; CHINA JINMAO (00817) increased by 4.98% to HKD 1.37; CHINA VANKE (02202) saw a rise of 4.30% to HKD 2.425; and CHINA RES LAND (01109) climbed by 3.94% to HKD 30.60. On the news front, the second-hand housing market in core cities showed signs of warming in August. According to statistics from the Beijing Zhonglian Research Institute, Shanghai Zhongyuan Real Estate, and Shenzhen Beike Research Institute, Beijing has experienced six consecutive months of year-on-year growth, Shanghai reached a new high for the same period in nearly five years, and Shenzhen's actual contracts saw a month-on-month increase of 12%. On the policy side, on August 28, a series of real estate reform policies were introduced at the central level, covering various aspects including housing sales systems, credit management, trusts, capital markets, urban renewal, and commercial real estate, establishing a comprehensive institutional framework for a new model of real estate development. Orient believes that, in summary, the impetus for the sale of existing homes is milder than the market's most pessimistic expectations, but the changes in supportive financing models are larger and have more far-reaching implications than the market anticipated. The market has somewhat overestimated short-term risks, while underestimating mid-term constraints, and in the long term, the benefits to the industry outweigh the drawbacks. The stock market may experience a temporary emotional shock in the short term, which could present an opportunity for moderate accumulation after a correction. In the long run, this will benefit leading central state-owned enterprises with strong product power, amplifying their competitive advantages and accelerating the concentration of the industry. Additionally, the proportion of second-hand home transactions is expected to further increase.