Nomura's research report indicates that weak sales in the domestic housing market continue to affect profits, and this year's first-half data and guidance may continue to be weak. It is believed that major mainland real estate developers will once again experience a disappointing first-half earnings season, and there are signs of cooling in the leasing business in June due to a sluggish market atmosphere and uncertain consumption prospects in the second half of the year.

The bank pointed out that due to the lack of significant changes in the real estate sales trend and the expectation that real estate policies in the second half of the year will only provide slight support, real estate developers are expected to adopt a more cautious attitude towards the full-year guidance for 2024. Nomura maintains a conservative view of the real estate sector and only bullish on quality companies in the real estate industry, including KE Holdings (BEKE.US).

Nomura has lowered Yuexiu Properties (01109.HK) target price from 46.5 yuan to 33.4 yuan, and Longfor Group (00960.HK) target price from 17.1 yuan to 12.6 yuan. Both stocks are maintained at a 'buy' rating. It has also lowered its China Overseas Land & Investment (00688.HK) target price from 14.8 yuan to 12.7 yuan, with a rating downgrade from 'buy' to 'neutral'. (vc/cy)

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