Nomura believes that with the mainland economic government shifting towards more growth-focused and intensive policy implementation, there will be a temporary rebound in sentiment for domestic real estate sales, especially in first-tier cities. However, it remains uncertain whether the recovery of sentiment towards domestic real estate sales can be sustained. The bank believes that the capital markets are still enthusiastic about real estate developers and value chain stocks, reaffirming its position on quality beta value supply chain stocks, namely KE Holdings (BEKE.US), as well as Rundian (01109.HK) and Longfor (00960.HK) with businesses in both property and consumer sectors.

The bank believes that the real estate markets in Shanghai and Shenzhen are relatively loosening restrictions, based on the fact that purchase restrictions in core areas are still in place. If the real estate market does not show significant recovery under the current round of policy support, the bank expects both cities to further relax restrictions on local residents in the coming quarters. Beijing may also gradually loosen restrictions on the local real estate market at a controlled pace in the next few weeks, primarily related to purchase restrictions. The bank believes that local governments plan to keep some 'ammunition' as a final resort to stabilize the local real estate market.