According to Securities Times, China Galaxy Securities released research reports stating that under the effect of a low base, the cumulative sales area and sales amount of national real estate from January to September 2024 decreased compared to the previous month, with the decrease narrowing. There was a slight recovery on the investment side. Since late September, various departments have introduced multiple policies for the real estate sector, providing support in terms of demand, supply, land market, and more. The bank believes that with strong policy support and the effect of the low base from last year, policy effects may gradually emerge: leading real estate companies demonstrating excellent operational management capabilities and having funding advantages may see increased market share. The bank is bullish on: China Merchants Shekou Industrial Zone Holdings (001979.SZ), Poly Developments and Holdings Group (600048.SH), China Vanke Co.,Ltd. (000002.SZ), Seazen Holdings (601155.SH); and recommends paying attention to: 1) Quality development: Greentown China (03900), China Resources Land (01109); 2) Quality property management: China Resources Mixc; 3) Quality commercial: Hang Lung PPT (00101); 4) Head construction companies: Greentown Mgmt (09979); 5) Leading agencies: KE Holdings-W (02423), 5i5j Holding Group (000560.SZ).

China Galaxy Securities' main points are as follows:

Sales: the year-on-year decrease in cumulative sales narrowed. From January to September 2024, the national commercial real estate sales area was 702.84 million square meters, a decrease of 17.10% year-on-year, with a decrease of 0.9 percentage points from the previous month; in September 2024, the monthly commercial real estate sales area was 96.8211 million square meters, a decrease of 10.98% year-on-year, with an increase of 50.04% compared to the previous month. The total national commercial real estate sales amount from January to September 2024 was 6,888 billion yuan, a decrease of 22.70% year-on-year, with a decrease of 0.9 percentage points from the previous month; in September 2024, the monthly commercial real estate sales amount was 915.653 billion yuan, a decrease of 16.27% year-on-year, with an increase of 43.23% compared to the previous month. The average sales price from January to September was 9,800 yuan per square meter, a decrease of 6.76% year-on-year, and a decrease of 0.56% compared to the previous month; the average sales price in September was 9,457 yuan per square meter, a decrease of 5.93% year-on-year, and a decrease of 4.54% compared to the previous month. There was a slight recovery in September compared to July and August. On September 24th, the central bank proposed a package of policies, and by the end of September, first-tier cities successively issued policies for the real estate market. Guangzhou took the lead in relaxing purchase restrictions, and Beijing, Shanghai, and Shenzhen have different degrees of reduction in home purchase thresholds. The bank believes that the policies concentratedly issued since late September may positively impact the real estate market performance in October, and policy effects may gradually become evident.

Investment: investment construction slightly recovered. Real estate development investment from January to September 2024 was 7,868 billion yuan, a decrease of 10.10% year-on-year, with a slight reduction from the previous month. In September, the monthly development investment was 939.645 billion yuan, a decrease of 9.36% year-on-year, with an increase of 0.69% compared to the previous month. As policies progress, the investment willingness of real estate companies slightly increased. In terms of new projects: from January to September 2024, the newly started area was 560.51 million square meters, a decrease of 22.20% year-on-year, with a reduction of 0.3 percentage points from the previous month. In September, the newly started area was 65.8611 million square meters, a decrease of 19.87% year-on-year, with an increase of 0.38% compared to the previous month. Real estate companies had relatively small land holdings in the previous stage, and with the slight improvement in the real estate market in September, there was a slight increase in new projects. In terms of work done: from January to September 2024, the area under construction was 368.16 million square meters, a decrease of 24.40% year-on-year, with an expansion of 0.8 percentage points from the previous month. In September, the completed area was 34.2244 million square meters, a decrease of 31.41% year-on-year, with an increase of 1.34% compared to the previous month. Due to the relatively high completion area last year, the year-on-year decrease in the completion area has widened, considering the good overall performance of the completion area in 2023, the completion area may continue to be under pressure in 2024.

Funds: year-on-year funds in place slightly narrowed. From January to September 2024, real estate companies had 7,889.8 billion yuan in funds in place, a decrease of 20.20% year-on-year, with a narrowing of 0.20 percentage points from the previous month. Including domestic loans of 1,146.6 billion yuan from January to September, a decrease of 6.20%; self-raised funds of 2,868 billion yuan, a decrease of 9.10%; deposits and prepayments of 2,359.3 billion yuan, a decrease of 29.80%; and individual mortgage loans of 1,107.9 billion yuan, a decrease of 34.90%. In September, among the sources of funding for real estate development, domestic loans saw a 14.40% month-on-month decrease; deposits and prepayments related to sales dropped by 26.26% month-on-month, with a widening of the decrease from the previous month. Due to the overall sluggish sales market, the year-on-year decrease in deposits and prepayments may continue to be under pressure. As policies for financing and the corporate side were introduced towards the end of September, the bank believes that the pressure on corporate financing may be relieved.

Risk Warning: Risks of policy driving falling short of expectations, risks of policy implementation falling short of expectations, risks of macroeconomic underperformance, risks of funds not meeting expectations, risks of significant fluctuations in housing prices.