HK Stock Market Move | Mainland property stocks mostly decline; top 100 developers' sales decline in first nine months flat; Citi expects developers' profitability to face risks.

Mainland property stocks mostly decline. As of press time, AGILE GROUP (03383) fell 6.87% to HK$0.122; SUNAC (01918) dropped 3.82% to HK$0.63; GREENTOWN CHINA (03900) declined 3.62% to HK$6.265; RONSHINECHINA (03301) fell 3.26% to HK$0.089. On the news front, according to the China Index Academy, in the first nine months of this year, the total sales of 100 developers amounted to RMB 2,259.72 billion, with the year-on-year decline flat compared to January-August. The property market remains in an off-season phase, with only core cities still seeing support driven by the launch of high-quality projects, while the sales performance decline of key developers slightly widened. Citi believes that 2027 will be a key year for home price recovery in core cities, supported by reduced new supply and inventory; however, it remains cautious on the fourth quarter of 2026, as developers' sales and profitability face risks following the completed-housing sales policy, including a shrinking new home market and pressure on profitability and return on equity from a lengthened cash conversion cycle. Recently, a package of policies has been implemented. The new policy on interest subsidies for commercial personal housing loans took effect on October 1, targeting primarily first-home buyers with rigid demand, limiting purchased housing floor area to no more than 120 sqm and total price to no more than RMB 1.5 million, with a subsidy of one percentage point for up to five years. In addition, around the National Day holiday, Beijing, Shanghai, Guangzhou, and Wuhan successively implemented detailed rules for improving the commercial housing sales system, with the core focus on advancing the completed-housing sales system.