China - Housing 05 (Jul 16 - Oct 21)

[winston]

China’s property price declines in lower-tier cities take heavy toll on middle class

Weakened real estate market in smaller Chinese cities is weighing on people’s ability to spend, impeding government’s goal of driving economic growth

Analysts say some third-, fourth- and fifth-tier cities have suffered due to a lack of industrial development and an outflow of workers seeking better jobs in bigger cities

by He Huifeng

Source: SCMP

https://www.scmp.com/economy/china-econ ... take-heavy

[winston]

Heat is on as China's home prices climb

by Eurus Yiu

New home prices in China rose in May, extending the uptrend for a third month.

New home prices in 100 cities rose 0.34 percent in May from a month earlier, quickening slightly from 0.23 percent in April.

April mortgage growth slowed to an eight-year low to 4.5 percent.

China is beginning to limit issuance of securities backed by residential mortgages, expanding efforts to rein in runaway property prices and household debt.

Slowing banks' ability to issue loans to residential buyers is the latest in a series of measures to stem skyrocketing home prices.

Source: The Standard

https://www.thestandard.com.hk/section- ... ices-climb

[winston]

Beijing once again warns investors against betting on China’s red-hot residential property market

Those who believe property prices will never fall will pay a big price, CBIRC Chairman Guo Shuqing tells Shanghai forum

Guo’s remarks show regulators are wary of housing bubbles: analyst

by Daniel Ren

Source: SCMP

https://www.scmp.com/business/banking-f ... ing-chinas

[winston]

Home sales in China are slowing down due to longer mortgage approval times as Beijing seeks to calm growth

A slowdown in home sales is likely good news for Beijing, which is keen for measured growth in China’s economy after the pandemic

Beike Research Institute says the average wait time for mortgage approval in 72 major cities in June was a third longer than a year ago

by Pearl Liu

Source: SCMP

https://www.scmp.com/business/china-bus ... r-mortgage

[behappyalways]

China developers’ defaults spread as developer Languang misses payment
https://www.theedgesingapore.com/news/p ... es-payment

[winston]

M Stanley: CN Developers' Interim Result Weak with 3.2% Avg. Core Profit Hike; Concerned about Deleveraging, GPM Stress

Morgan Stanley projected an average 1H21 core earnings growth of 3.2% for Chinese developers, along with gross margin slide.

The broker was concerned about homebuilders' deleveraging and continuous gross margin pressure.

CHINA AOYUAN (03883.HK), R&F PROPERTIES (02777.HK), CHINA JINMAO (00817.HK) and YUZHOU GROUP (01628.HK) would be the weaker players.

Related News: BofAS Cuts TPs on CN Developers by 9% on Avg.; Top Picks Vanke, CR Land, Seazen, Shimao

Source: AAStocks Financial News

[winston]

Mainland developers' shares fall further

Shares in mainland developers fell further after mainland media reported Beijing will limit land acquisitions.

The pilot developers, which was included in China's "three red lines" scheme, are told to spend no more than 40 percent of annual sales to buy land, mainland media reported.

However, some have exceeded the ceiling, including Yuexiu Property (0123), Jiayuan International (2768), Greentown China (3900), China SCE Group (1966), China Resources Land (1109) and Agile Group (3383).

Meanwhile, Guangzhou R&F Properties (2777) said there is no shareholding relationship between it and the Seedland Group, which failed to repay commercial paper earlier.

Seedland Group is chaired by Zhang Liang, son of Zhang Li, co-founder of R&F Properties.

R&F Properties said it does not have any financial loan or debt guarantee arrangements with the Seedland Group that directly or indirectly create a financial liability on the part of the company.

Source: The Standard

https://www.thestandard.com.hk/breaking ... ll-further

[winston]

China Property – Policy headwinds have spilled over to property management sector

The share prices of the Chinese property sector, especially the property management companies, came under heavy selling pressure on 26 Jul.

Besides weak sentiment on the Chinese equity market overall, there was also news that eight government departments had recently jointly issued some housing policy guidelines.

This entails enhancing control over
i) property development,
ii) property sales,
iii) property rental and
iv) property management.

Although policy headwinds on the property development segment is well-known in order to prevent an overheated residential market, the increased scrutiny on the property management sector raises concerns over whether there will be a potential shift in the policy direction in this sector, which was seen as supportive at the start of the year.

In particular, the guidelines are looking at addressing some malpractices within the property management sector.

Although the financial impact of this appears minimal for now, the heavy share price declines could also be attributed to the higher trading multiples of the sector and some profit taking amid weak overall sentiment on Chinese equities.

We expect the policy direction to remain supportive on the development of the property management sector over the medium to longer term.

As this round of measures is aimed at rectifying misconduct within the property management sector, we believe this would benefit higher quality players with strong reputation and track record.

Although sentiment on the Chinese property sector (both developers and property management companies) is likely to remain weak in the near-term, investors with a longer-term horizon and looking for value-oriented plays can consider China Overseas Land & Investment (COLI) (688 HK), China Resources Land (CR Land) (1109 HK), Longfor Group (960 HK) and KWG Group (1813 HK).

For growth stocks within the China property sector, we would look at the property management sector and our preference is Country Garden Services (6098 HK).

Source: OCBC

[behappyalways]

A good watch


不降房价就摘乌纱 立下“军令状”三年治好房地产
https://m.youtube.com/watch?v=1qxgnyrTyUc

[winston]

<Research Report>CICC: CN Developers May Hail New Wave of Rebound, Upbeat on COLI, CIFI, CR Land, Longfor, Powerlong for H-shrs

Whilst negatives on Chinese property developers, such as policy austerity and profit margin weakness, have fully unleashed, the profit margin of the second batch of concentrated land supply projects have seen uptick, CICC wrote in its report.

Although some cities may still step up control on the market in short run, or the interim results of developers may appear to wane, CICC insisted that pessimism should not be overblown on Chinese developers as the sector valuation and positions have set the all-time lows.

The broker even gauged a new wave of rebound is coming for the sector.

The market should pay heed to bellwethers whose finance, land bank and turnover fare better.

CICC was upbeat on CHINA OVERSEAS (00688.HK),CIFI HOLD GP (00884.HK),CHINA RES LAND (01109.HK), LONGFOR GROUP (00960.HK) and POWERLONG (01238.HK), all rated Outperform.

Source: AAStocks Financial News