Founder-CEO & Chief Analyst, Real Estate Foresight

Robert Ciemniak

Founder-CEO & Chief Analyst

Real Estate Foresight

Since 2012, REF has been helping investors with market research, project due diligence, and strategy development. This has ranged from detailed assessments and estimates on distressed developers' project portfolios to market due diligence on specific projects to macro-level questions linked to demand for commodities. The unique combination of the housing markets and developer data from data partner China Index Academy in Beijing, primary research, and technology-powered alternative data collection from public sources result in a valuable content set used in REF analytics and reports.

Predictive Analytics for China Property

Macroeconomics

<ul>
<li>China's crude steel production data behaved differently in the 2021-2023 downturn relative to new home sales and new starts, compared to the prior cycles.</li>
<li>The 40% drop (12M vs prior 12M) at the low point for new starts compares with around 10% for the crude steel.</li>
<li>In this note, we outline a few possible explanations, with some twists.</li>
</ul>


China's crude steel production data behaved differently in the 2021-2023 downturn relative to new home sales and new starts, compared to the prior cycles.
The 40% drop (12M vs prior 12M) at the low point for new starts compares with around 10% for the crude steel.
In this note, we outline a few possible explanations, with some twists.


China Property And The Demand For Commodities Puzzle

HK/China Equity Long-Short

Osbert Tang, CFA

Quantitative Analysis

<ul>
<li>2023 is the worst year for our "Buy the Worst" strategy as it returned -34.5% YTD, underperforming the HSI by 20.7pp. The two property names are the key drags.</li>
<li>Despite a poor 2023, the strategy has still outperformed the HSI by 17.9pp for 2018-2023. It remains significantly better than buying the winners in the current year.</li>
<li>For 2024, our strategy is to switch to <a href="https://www.smartkarma.com/entities/li-ning-co-ltd" target="_blank" data-smartkarma-citation="entities:6047:1" rel="noopener">Li Ning (2331 HK)</a>, <a href="https://www.smartkarma.com/entities/country-garden-services-holdin" target="_blank" data-smartkarma-citation="entities:27343:1" rel="noopener">Country Garden Services (6098 HK)</a>, <a href="https://www.smartkarma.com/entities/meituan" target="_blank" data-smartkarma-citation="entities:26970:1" rel="noopener">Meituan (3690 HK)</a>, <a href="https://www.smartkarma.com/entities/wuxi-apptec" target="_blank" data-smartkarma-citation="entities:23679:1" rel="noopener">Wuxi Biologics (2269 HK)</a>, and <a href="https://www.smartkarma.com/entities/zhongsheng-group-holdings" target="_blank" data-smartkarma-citation="entities:10573:1" rel="noopener">Zhongsheng Group (881 HK)</a>. </li>
</ul>


2023 is the worst year for our "Buy the Worst" strategy as it returned -34.5% YTD, underperforming the HSI by 20.7pp. The two property names are the key drags.
Despite a poor 2023, the strategy has still outperformed the HSI by 17.9pp for 2018-2023. It remains significantly better than buying the winners in the current year.
For 2024, our strategy is to switch to Li Ning (2331 HK), Country Garden Services (6098 HK), Meituan (3690 HK), Wuxi Biologics (2269 HK), and Zhongsheng Group (881 HK). 


"Buy the Worst" HSI Strategy: A Tragic 2023 and What About 2024?

Thematic (Sector/Industry)

<ul>
<li>The weekly new home sales data indicates a smaller pace of decline for the select 16 major cities with consistent data towards the year-end.</li>
<li>Xi'an stands out as an outperformer. Recent policy easing in Beijing and Shanghai may not be fully reflected in the data yet.</li>
<li>The small-sample weekly data serves as a good directional indicator as to what to expect in the national figures for the same month (published in the middle of next month).</li>
</ul>


The weekly new home sales data indicates a smaller pace of decline for the select 16 major cities with consistent data towards the year-end.
Xi'an stands out as an outperformer. Recent policy easing in Beijing and Shanghai may not be fully reflected in the data yet.
The small-sample weekly data serves as a good directional indicator as to what to expect in the national figures for the same month (published in the middle of next month).


China Property - New Home Sales Growth Less Negative (16 Cities) To Week Ending Dec 24

<ul>
<li>This note is a weekly curated selection of Chinese news articles and company announcements focused on developers in distress</li>
<li>We look for their deals, updates, specific project progress news ('local signals'), as well as relevant local research commentaries about the market</li>
<li>We do not verify the underlying data or provide any opinion, we only select and summarize the information; See direct links to sources</li>
</ul>


This note is a weekly curated selection of Chinese news articles and company announcements focused on developers in distress
We look for their deals, updates, specific project progress news ('local signals'), as well as relevant local research commentaries about the market
We do not verify the underlying data or provide any opinion, we only select and summarize the information; See direct links to sources


China Property Developers In Distress - Weekly News & Announcements Tracker | Dec 22-28, 2023

<ul>
<li>The latest China housing metrics remain weak, 'less negative' by some 12M measures, in line with our forecast from December 2022 data, but watch out for some major data twists</li>
<li>The expanding easing of policies is still far from a major stimulus, and the ‘whitelist’ to support certain developers indicates a selective approach by the policymakers, focused on "risk prevention"</li>
<li>The market for new home sales (mostly pre-sales) diverges from the secondary market, and the policy steers toward affordable housing, public facilities, urban village renovation</li>
</ul>


The latest China housing metrics remain weak, 'less negative' by some 12M measures, in line with our forecast from December 2022 data, but watch out for some major data twists
The expanding easing of policies is still far from a major stimulus, and the ‘whitelist’ to support certain developers indicates a selective approach by the policymakers, focused on "risk prevention"
The market for new home sales (mostly pre-sales) diverges from the secondary market, and the policy steers toward affordable housing, public facilities, urban village renovation


China Property - The Latest Signals In The Housing Markets, Data Caveats | December 2023

China

China Evergrande Group is an integrated residential property developer. The Company, through its subsidiaries, operates in property development, investment, management, finance, internet, health, culture, and tourism markets.

Price Gauge
52-week Range	0.00 - 0.00
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Evergrande (3333 HK)

China Property And The Demand For Commodities Puzzle

China's crude steel production data behaved differently in the 2021-2023 downturn relative to new home sales and new starts, compared to the prior...

Robert Ciemniak

"Buy the Worst" HSI Strategy: A Tragic 2023 and What About 2024?

2023 was bad for the "Buy the Worst" strategy, but it still outperformed the HSI for 2018-2023. In 2024, we will switch to Li Ning, Country Garden...

Osbert Tang, CFA

China Property - New Home Sales Growth Less Negative (16 Cities) To Week Ending Dec 24

China Property: The weekly new home sales data indicates a smaller pace of decline for the select 16 major cities with consistent data towards the...

Robert Ciemniak

China Property Developers In Distress - Weekly News & Announcements Tracker | Dec 22-28, 2023

A weekly (Dec 22-28, 2023) curated selection of Chinese news articles and company announcements focused on developers in distress.

Robert Ciemniak

China Property - The Latest Signals In The Housing Markets, Data Caveats | December 2023

What's the latest with China's housing markets and what data caveats to watch for? In this note, we draw on the range of data metrics and our...

Robert Ciemniak

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

China Property And The Demand For Commodities Puzzle

China's crude steel production data behaved differently in the 2021-2023 downturn relative to new home sales and new starts, compared to the prior...

Robert Ciemniak

"Buy the Worst" HSI Strategy: A Tragic 2023 and What About 2024?

​2023 was bad for the "Buy the Worst" strategy, but it still outperformed the HSI for 2018-2023. In 2024, we will switch to Li Ning, Country Garden...

Osbert Tang, CFA

China Property - New Home Sales Growth Less Negative (16 Cities) To Week Ending Dec 24

China Property: The weekly new home sales data indicates a smaller pace of decline for the select 16 major cities with consistent data towards the...

Robert Ciemniak

China Property Developers In Distress - Weekly News & Announcements Tracker | Dec 22-28, 2023

A weekly (Dec 22-28, 2023) curated selection of Chinese news articles and company announcements focused on developers in distress.

Robert Ciemniak

China Property - The Latest Signals In The Housing Markets, Data Caveats | December 2023

What's the latest with China's housing markets and what data caveats to watch for? In this note, we draw on the range of data metrics and our...

Robert Ciemniak

2023 was bad for the "Buy the Worst" strategy, but it still outperformed the HSI for 2018-2023. In 2024, we will switch to Li Ning, Country Garden...