Morgan Stanley published a research report that the performance of inner housing stocks is expected to outperform the Hang Seng Index in 2020, mainly driven by policy and credit easing, robust contract sales and profit growth by quality developers, and valuation attraction. Continue to find the industry attractive. Sunac China (01918.HK), Xuhui Holdings Group (00884.HK) and China Resources Land (01109.HK) are preferred.

Morgan Stanley expects the performance of the mainland real estate market to be stable in 2020. National real estate sales are expected to grow by 5% year-on-year, transaction volume may drop slightly by 1.3%, while the average sales price will increase by 6.4%. New housing construction is expected to grow by 3% year-on-year. National real estate investment increased by 6%. Further market consolidation will bring stable sales and profits to large developers.

Among the private housing companies covered by the bank, their sales growth is expected to range from 10% to 20%. Profits grew by an average of 23% in fiscal year 2019 and 21% in fiscal year 2019-2021.