Futu News reported on December 16 that domestic housing stocks continued to rise today. As of press release, Times China Holdings rose 4.16%, China Aoyuan, China Overseas Hongyang Group, Longguang Real Estate, and Xuhui Holdings rose more than 3%, while Baolong Real Estate, Longhu Group, and Sunac China rose nearly 3%.

According to a report previously published by Citi, the 34 mainland developers it covers are expected to increase sales by 13% in 2020, compared to 31% and 19% respectively in 2018 and 2019. Their sales growth is resilient, paving the way for profit growth next year and beyond.

The bank expects that market consolidation will accelerate next year, so that housing companies in the Shanghai market will have more saleable resources and strengthen their ability to obtain financing. It believes that the industry will start in the fourth quarter, perform better due to the visibility of profits, and continue to outperform the market.

The bank said that future catalysts include improvements in real estate policies and the outlook for interest rate cuts in the first quarter. Coupled with valuations that are still attractive, domestic housing is still worth looking forward to.

CICC, on the other hand, said that Sunac has abundant land storage and is progressing smoothly. It is expected that the debt ratio for the full year of 2019 will drop to 140%. Future financing costs may drop. The new acquisition company is expected to bring back 4-5 billion dollars in sales payments for Sunac China within 2019, making it the first choice for domestic housing stocks.