Glonghui, January 25 | UBS released a report stating that the General Office of the People's Bank of China and the General Office of the General Administration of Financial Supervision have introduced policies to improve operating property loans. Among them, the scope for revenue to be used to repay parent company debts has been expanded rather than previous project-level construction. The notice stipulates that the loan amount for operating properties shall, in principle, not exceed 70% of the property valuation. The term is generally no more than 10 years, and the maximum period is 15 years. The usual practice is that the property valuation ratio is 50%, and the loan period is 10 years. UBS believes the policy is good news for private developers with large commercial real estate assets, such as Longhu and Xincheng Development. As of June 2023, Longhu had investment properties worth RMB 193 billion. Assuming that the mortgage ratio increases by 20 percentage points, this means that the operating loan amount will increase by RMB 38.6 billion, equivalent to 1.5 times its 2024-2025 public bond maturity date, and 19% of its current interest-bearing debt, thus increasing its ability to repay public bonds from 2024 to 2025.