Hong Kong stock real estate sector continued to be strong yesterday, a number of real estate stocks rose. As of press time, time China Holdings and Zhongjun Group Holdings rose more than 6%, while Agile Group and R & F Real Estate rose more than 4%.

In addition to policy support, China Evergrande Group, who has been suspended for a long time, issued a notice last night that he expected to announce a preliminary restructuring plan at the end of July.

China Evergrande Group HKEx announced that trading in the company's shares will continue to be suspended until further notice; the company is actively promoting the restructuring work. As announced on January 26th, 2022, the company expects to announce the preliminary reorganization plan before the end of July; Evergrande Property Services's pledge guarantee independent investigation is actively under way, and the expected time for the completion of the independent investigation has not yet been determined at this stage. The company is taking appropriate measures to comply with the resumption guidelines and the relevant listing rules as set out in the letter, and to provide the public with information on the latest developments and will make further announcements in due course.

There are signs of recovery in the real estate market

It can be observed that the real estate market has stabilized recently. In May 2022, the month-on-month sales of commercial housing across the country were + 29.7%, year-on-year-37.7% (the decline was narrower than that in April). High-frequency data showed that from June 11 to June 17, new houses in 40 cities and second-hand houses in 17 cities showed positive year-on-week results.

There are differences between cities and within cities, and the recovery speed of high-energy cities is relatively fast. after the unblocking of the epidemic in Shanghai, the trading volume has rebounded in a V-shaped shape, while the trading volume in third-and fourth-tier cities continues to hover at a low level. The recovery of improved products in the same city is the first to start. The opening of high-end improvement in many core areas of Shanghai has reached 100%, while the removal rate of peripheral rigid demand projects is less than 50%. The availability of funds and sales rebates by housing enterprises have also improved, providing support for new construction and an increase in sales volume in the second half of the year, so as to ensure the continuity of market recovery.

Continued policy easing is expected to promote fundamental recovery

Last week, many places further introduced real estate easing policies: Hefei increased the amount of loans for real estate development and increased the credit line for high-quality construction enterprises; families with many children in Neijiang, Sichuan, made a minimum down payment of 20% and a maximum subsidy of 24000 yuan; families without houses in Hangzhou can borrow up to 1.2 million yuan from the provident fund for first-time home purchases.

From a data point of view, cities that have introduced a number of policies to support them have indeed shown a trend of improvement in volume and prices, and the current industry fundamentals are still fragile, and the recent industry recovery under high-frequency data has also shown a structural market rather than an overall improvement, so continued policy easing is a necessary condition for market confidence and a real recovery in the industry.

Will the policy of easing be tightened again at a later stage?

Some institutions judge that the market recovery in the second half of the year is weak. In the context of stable economic growth, the weak recovery of the real estate industry can not promote the shift of regulatory policies, local governments rely heavily on land finance, and it is expected that the tone of regulation and control will still be loose for a period of time in the future.

In the environment of gradual recovery of the market and continued loose policies, the real estate sector is expected to usher in a new round of market.

You can pay attention to the target.

Some institutions predict that with the continued loosening of the policy, the joint improvement of supply and demand will gradually drive the real estate recovery, and the sector opportunities will gradually transition from policy expectations to fundamental improvement. The head real estate enterprises with the ability to take land and push the market will benefit more from the competitive pattern and the improvement of the land market, realizing the double reversal of sales scale and management quality.

Continue to recommend three main lines: 1) the plight reversal enterprises that have made full profits and benefited from the optimization of centralized land supply policy: Vanke A

2) the leading housing enterprises under the continuous improvement of the competition pattern:Greentown China (03900.HK) $, Poly Development

3) highly rated private enterprises with steady operation: Binjiang Group,$Xuhui Holdings Group (00884.HK) $。