Zhitong Financial APP learned that Ferry released a report saying that Kerry data showed that average sales by major mainland developers fell 7% in January from a year earlier. Although the bank expects sales to remain weak in February, investors are advised to wait for a bottom after a recent correction in high-quality and high-beta shares, and the market expects more policy or credit easing in the coming months.

The bank said that inner housing stocks have fallen 13% since January, and because of concerns about rights issues and profit departures, internal housing valuations have fallen to levels seen in the fourth quarter of 2019 (that is, a price-to-earnings ratio of 4.4 times forecast earnings and a 47% discount to net asset value per share). And now it's a bottoming opportunity. The bank is optimistic about inner rooms with rich and low cost of sales resources and stubborn executive ability.

The bank said it preferred Xuhui (00884) and Sunac (01918), with a target price of HK $7.83 and HK $54.82, respectively, and was bullish on Hop King Pacific (01813) and Zhongjun Group (01966) with a target price of HK $13.33 and HK $6.80, respectively. Shimao Real Estate (00813) was upgraded from "hold" to "buy".

The bank believes that the mainland will introduce more relaxing policies on the property market to stimulate land sales, and estimates that there is a high chance for the people's Bank of China to cut interest rates in the coming months to ease the downward economic situation, which the bank believes will be beneficial to the industry as a whole. Developers with high debt and high borrowing costs will be the main beneficiaries, such as Sunac and Agile (03383).