Huatai Securities: Product strength may become one of the core competitive advantages for real estate developers to cross the cycle in 2026, reshaping their market position and competitive landscape.

Huatai Securities research report stated that on December 22-23, the Ministry of Housing and Urban-Rural Development held a work conference to summarize the real estate work in 2025, deploy key tasks for 2026, and outline the policy direction for the "15th Five-Year Plan." Huatai Securities believes that in 2026, policies such as controlling growth, destocking, and optimizing supply will be further implemented, coupled with potential reserve requirement ratio cuts and interest rate reductions, helping the market stabilize. The supply side will continue to be optimized, and product competitiveness may become one of the core strengths for real estate companies to navigate through the cycle, potentially reshaping their market position and competitive landscape. This meeting of the Ministry of Housing and Urban-Rural Development follows the central government's firm attitude towards stabilizing the industry and provides a series of directions. The direction towards "optimal supply" is expected to reshape the competitive landscape for companies and bring development opportunities for property management companies. Key recommendations include: 1. Real estate stocks that combine "good credit, good city, good products" (the "three goods"); 2. Real estate companies that rely on operational capabilities to manage cash flow during market adjustments; 3. Hong Kong local real estate companies benefiting from the recovery of the Hong Kong market; 4. Property management companies benefiting from stable cash flow and dividend advantages.