HK Stock Market Move | Mainland property stocks continue to decline; industry insiders believe a nationwide interest subsidy policy is unlikely; spot property sales will hit all developers in the short term.

Mainland property stocks continue to decline. As of press time, R&F PROPERTIES (02777) fell 6.72% to HK$0.125; SUNAC (01918) dropped 4.62% to HK$0.62; SEAZEN (01030) declined 3.09% to HK$1.41. On the news front, market rumors recently circulated that a nationwide interest subsidy policy will be implemented, with the Ministry of Finance and local governments jointly providing interest subsidies of up to 100 basis points, pushing first-home mortgage rates down to the 2% level. Another version claims a total quota of 100 billion yuan with a 20-basis-point interest subsidy. Multiple securities firm real estate industry analysts take a cautious stance on these rumors, believing that the likelihood of a nationwide interest subsidy policy being implemented is low. One analyst said, "At the national level, extending the loan term is actually similar to the interest reduction from interest subsidies/rate cuts." In addition, at the end of August, multiple ministries simultaneously introduced a package of real estate and supporting financing policies for the housing market. Guosheng pointed out that spot property sales will hit almost all developers in the short term (again emphasizing the most direct impact on "project cash flow" and "disposable cash flow"), though different enterprises have varying capacities to withstand it: large enterprises with high leverage, extensive land acquisitions, and many projects under construction especially private enterprises will be marginally affected more significantly; local small developers that originally had low leverage, self-owned capital, and small-scale development will be relatively less affected; the likelihood of already-distressed enterprises recovering has greatly diminished.