HTSC Cautious on Weak Revival in CN Housing Mkt, Eyes Opportunities of Quality Leading SOEs
2023/11/07
Huatai Securities issued a report on the need to be cautious about the weak recovery of the domestic property market.
In terms of real estate sales, sales growth of the top 100 real estate enterprises in China declined YoY again after June, with a cumulative YoY decline of 11.8% in the first nine months, a weaker performance than the industry as a whole.
With the market adjusting, central/state-owned enterprises still have an advantage over private companies, but their lead narrowed from 92 ppts in April to 24 ppts in September.
On the financing front, net repayments of RMB211.2 billion were made from various financing sources in the first nine months of the year, with corporate financing yet to improve.
Bond maturities in the real estate sector contracted, and the market became more concerned about the cash flows of some mixed-ownership and private real estate enterprises.
On the investment front, the concentration of land acquisition has further increased, with the share of centralised state-owned enterprises declining slightly and leading real estate companies focusing on core cities.
In addition, Huatai expected more cities to implement optimised property policies and form a synergy with the other economic policy packages to drive the economy back to positive territory, as well as stabilising housing price expectations and demand for housing.
The broker is optimistic about quality real estate companies with sufficient value and strong replenishment capacity in mainstream cities.
Source: AAStocks Financial News
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