According to a report released by CICC, under the dual influence of gradually diminishing policy effects and seasonal factors, new home sales in July fell by 30% compared to the previous month, and still fell by more than 10% year-on-year against the low base number. Second-hand home sales remain stable month-on-month and increase by about 30% year-on-year, with differentiated performances continuing. The bank believes that the turning point in the market supply-demand relationship still depends on the improvement of the macroeconomic environment and the further implementation of collection and storage policies. It is recommended to continue to focus on the sustainability of the downward trend in listing volumes for leading cities.
Regarding the real estate developer sector, the bank believes that the investment side is still maintaining a cautious attitude, but does not rule out phased trading opportunities. If fiscal policies accelerate in the second half of the year, the real estate market may have a chance to stabilize marginally with the economic recovery. The recommendation is to prioritize financially and operationally resilient high-quality targets, such as China Resources Land (01109.HK), China Overseas Development (00688.HK), and Yuexiu Property (00123.HK).
Regarding the property management sector, the bank recommends focusing on opportunities to allocate high-quality alpha targets and believes that in the short-term dimension, property management beta still dominates the trend of the sector. But as the valuation of the sector approaches historical lows, the relative volatility of its stock price performance may be expected to narrow. At the same time, some alpha targets with outstanding core competitiveness or continuous operational improvement may also have better opportunities for low-positioning. Looking forward, the mid-term performance fulfillment (including performance growth, cash flow performance, dividend payment, etc.) may be the next independent catalyst for the sector. The bank continues to recommend China Resources Mixc Living (01209.HK), Greentown Ser (02869.HK), China OVS PPT (02669.HK), and Poly PPT Ser (06049.HK).
CICC's latest ratings and target prices for domestic real estate and property management stocks are as follows:
Stocks | Rating | Target price (HKD)
China Resources Land (01109.HK) | Outperform | HKD 33.89
China Overseas Development (00688.HK) | Outperform | HKD 16.33
Yuexiu Property (00123.HK) | Outperform | HKD 7.1
China Resources Mixc Living (01209.HK) | Outperform | HKD 35
Greentown Ser (02869.HK) | Outperform | HKD 4.6
China OVS PPT (02669.HK) | Outperform | HKD 6
Poly PPT Ser (06049.HK) | Outperform | HKD 36.7