China - Housing 06 (Nov 21 - Dec 26)

[behappyalways]

中國大陸20城下調房貸利率 兔年盼揮別房市低谷｜方念華｜FOCUS全球新聞 20230208@tvbsfocus
https://m.youtube.com/watch?v=uIr-tNjo2mA

[winston]

China's home prices steady after stimulus

New-home prices in 70 cities, excluding state-subsidized housing, remained unchanged, compared with a 0.25 percent decline in December.

In the secondary market, prices fell 0.28 percent, better than the 0.41 percent decline the previous month.

Sales by the 100 biggest real estate developers continued to slump, down 33 percent from a year earlier.

Source: Bloomberg

https://www.thestandard.com.hk/section- ... r-stimulus

[winston]

Green light boosts China property stocks

Shares of Chinese developers jumped after Chinese authorities said they will allow private equity funds to invest in residential housing, including projects under construction, affordable homes and rental projects in a trial program.

Investment in commercial real estate and infrastructure projects is also allowed under the program.

Source: Bloomberg

https://www.thestandard.com.hk/section- ... rty-stocks

[winston]

China home deals surge 32pc

The turnover rate of the market in first-tier cities increased by 5 percent on a monthly basis, with Guangzhou and Shenzhen experiencing the most significant growth rate of 79 percent and 57 percent respectively.

In contrast, Shanghai saw a drop in both monthly and yearly terms, with a 13 percent decline monthly and a 32 percent decline yearly.

Meanwhile, second and third-tier cities saw a substantial increase of over 40 percent month-on-month, with Jinan experiencing a surge of 108 percent.

The total inventory of apartments in Beijing, Fuzhou, Wenzhou, Hangzhou, Shenzhen, Guangzhou and Nanjin declined slightly with Shenzhen seeing a more substantial fall of 4.9 percent compared with January.

Source: The Standard

https://www.thestandard.com.hk/section- ... surge-32pc

[behappyalways]

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https://m.youtube.com/watch?v=dy6M6pE3LmQ

[winston]

China's 13-month property slump ends

Sales of new and second-hand commercial housing in China ended 13 months of falls in January and February, said Ni Hong, the minister for housing and urban-rural development, adding that he expected the market to stabilize and rebound.

Work on many housing projects has resumed since the end of the Covid restrictions at a much higher rate than before and the transaction volume had improved significantly with the number of viewings of new homes increasing.

Source: Reuters

https://www.thestandard.com.hk/section- ... slump-ends

[winston]

Chinese property stocks slid into bear market as policy optimism fades

by Abhishek Vishnoi & John Cheng

While an increase in China’s home sales for the first time in 20 months has helped signal some recovery, buyers remain hesitant to invest in the property sector after its worst downturn.

Source: Bloomberg

https://www.theedgemarkets.com/node/658503

[behappyalways]

泡沫化危機! 北京統計中國空屋 "爛尾樓"事件重擊房產市場 空屋率高達12% 6億棟空屋夠每個家庭分"1棟" 中國統計局:會好轉│記者 林芷綺│【國際大現場】20230316│三立新聞台
https://m.youtube.com/watch?v=3OGO-wobHnA

[winston]

CHINA PROPERTY – SELECTIVE QUALITY NAMES WORTH A RELOOK POST FY22 RESULTS

Recent data from China’s National Bureau of Statistics (NBS) provided some signs of encouragement that the worst could be over for the real estate sector, although the recovery would likely remain patchy.

Total real estate investments (REI) and residential gross floor area (GFA) new starts fell year-on-year (YoY) for 2M23.

On the other hand, improvements were seen in residential transaction value, with higher prices offsetting a mild decline in transaction volumes.

Meanwhile, residential GFA completions also saw an increase and this augurs well for the property management companies should this trend continue.

Given the fluidity of the situation, we would need to observe data points in the upcoming months to determine the strength of the physical real estate market recovery.

Another encouraging signal from the NBS data can be seen from housing prices in 70 large and medium-sized Chinese cities.

Although YoY changes in prices for newly constructed residential buildings remained in negative territory (-1.9% in Feb 2023), it was up 0.3% on a month-on-month (MoM) basis. This was the first MoM increase in 18 months.

Statistics from the well-followed database provider CRIC showed that growth in contracted sales of the top 100 developers in China finally turned positive in Feb 2023 (+14.9% YoY). However, this increase was likely attributed to the different timing of the Lunar New Year period in 2022 and 2023.

If we look at 2M23 data, total contracted sales came in at CNY819b, representing a YoY decline of 11.6%. While still early days, the current magnitude of decline offers some room for optimism given that 2022 contracted sales for the top 100 Chinese developers had fallen by a significant 41.6%.

Notwithstanding some encouraging economic and industry data points, share prices of Chinese real estate players had retreated after a strong start in Jan this year.

The MSCI China Real Estate Index fell 2.6% year-to-date (YTD) (total returns as at 20 Mar 2023 close) after appreciating as much as 16.2% YTD as at 27 Jan 2023. This is in-line with the correction seen in the MSCI China Index, which is now down 2.0% YTD after having registered positive total returns of as much as 17.5% YTD back in late-Jan.

Besides the broader market weakness, we believe share prices had also been adversely impacted by a number of negative profit warning announcements by both developers and property management companies.

Another concern from investors on the Chinese real estate sector stems from dilution risks from potential equity fund raising activities. There could also have been disappointment from investors who were expecting more policy easing measures by the Chinese government.

Given the recent pullback in share prices as highlighted earlier, coupled with continued downward earnings revisions by consensus, the MSCI China Real Estate Index is trading at a 12-month blended forward price-to-earnings (P/E) multiple of 7.5x (as at 20 Mar 2023), which is 2.3 standard deviations (s.d.) above the 5-year average of 5.6x.

Forward price-to-book (P/B) multiple appears more reasonable, at 0.71x, which is 0.8 s.d. below the 5-year average of 0.86x, but we believe there could be material impairments ahead which would impact net asset values as developers take the opportunity to kitchen sink when they report their FY22 results.

The forward dividend yield stood at 4.0%, or 2.3 s.d. below the 5-year average (5.9%). We expect dividends declared by property players to disappoint in the upcoming results season as companies continue to conserve their cash reserves.

While there are more encouraging signs of a sector recovery, uncertainties in the macroeconomic environment and policy front are likely to remain, which implies the likelihood of continued volatility in share prices.

We would recommend sticking with quality state-owned enterprise (SOE) players, and be highly selective on privately owned enterprise (POE) names. The better-quality companies within these two groups would be able to make solid market share gains, while also being relatively unscathed from Sino-US geopolitical tensions given the localised nature of real estate in China.

Among property developers, we continue to like China Overseas Land & Investment [688 HK; FV: HKD25.07], China Resources Land [1109 HK; FV: HKD43.43], and Yuexiu Property [123 HK; FV: HKD14.20]. Greentown China [3900 HK; FV: HKD19.30] is a new addition, and we also add back Longfor Group [960 HK; FV: HKD26.57] following its recent share price weakness and decent FY22 results.

For property management companies, our preferred picks are China Resources Mixc Lifestyle Services [1209 HK; FV: HKD50.50] and Poly Property Services [6049 HK; FV: HKD52.50], with the latter being a new addition.

Some encouraging signs from physical real estate market data points, but recovery still patchy

Share prices have pulled back amid broad market weakness; selective quality names worth a relook post FY22 results

Continue to position with quality SOE players and be highly selective on POE names; top picks are 688 HK, 1109 HK, 3900 HK, 960 HK and 123 HK for property developers, and 1209 HK and 6049 HK for property management companies.

Source: OCBC

[winston]

China’s property crisis: Evergrande, Shimao and other fallen tycoons rush for lifelines to fix US$232 billion debt headache

China Evergrande stretches patience among creditors after two years of swimming in rising debt tide before unveiling its workout plan this week

Other debt-stricken developers are putting March 31 as a marker after many false starts

by Pearl Liu and Elise Mak

Source: SCMP

https://www.scmp.com/business/article/3 ... 32-billion