HK Stock Market Move | Real estate stocks have fallen again as the impact of the new policy 828 gradually becomes apparent. The market is concerned about how current home sales will affect the scale of real estate companies and their return on equity (ROE).

Chinese property stocks have declined again. As of the time of writing, SUNAC (01918) is down 3.91%, trading at HKD 0.615; R&F PROPERTIES (02777) is down 2.75%, trading at HKD 0.177; C&D INTL GROUP (01908) is down 2.23%, trading at HKD 12.28; SEAZEN (01030) is down 0.68%, trading at HKD 1.455. On the news front, Ping An Securities pointed out that the real estate sector initially retracted before rising, with the impacts of the 828 new policies gradually becoming evident. Investors are mainly concerned about how current home sales will affect the scale and ROE of property enterprises. On one hand, current home sales result in delayed cash returns, which will occupy a property company's own funds for a longer time, meaning that the same amount of equity may sustain a reduced sales scale. On the other hand, a shrinking scale signifies declining revenue and a decrease in total asset turnover, suggesting that, all else being equal, a company's ROE may also decline. The firm believes that due to changes in sales and financing systems, the industrys business model and property company investment models are facing adjustments and reconstruction in the short term, which may lead to a period of growing pains. However, in the medium to long term, current home sales will reduce delivery risks while aiding property companies in enhancing their operational and product capabilities, placing greater emphasis on project quality rather than sales scale. Property companies with strong own capital strength, outstanding operational management, and the ability to create high-premium products are expected to expand their advantages.