Equity Research in HK and Mainland China

Li Tang

Thematic (Sector/Industry)

<ul>
<li>Property lending has reportedly improved significantly in both mom and yoy terms in October, with a preliminary estimates ranging from 150-200bn yuan increase on top of the September level.</li>
<li>Shenzhen recently announced the third and final batch of land parcels for sale this year.</li>
</ul>
<ul>
<li>We see this as policy finetuning, rather than a broad easing</li>
<li>
<div>We see a short-term opportunity to buy high-quality, low leveraged developers in advance of further calibrated policy support.Longer-term investors are advised to look at developers with the potential of realising higher valuation by listing property management units, as has been done by other developers.</div>
</li>
</ul>


Property lending has reportedly improved significantly in both mom and yoy terms in October, with a preliminary estimates ranging from 150-200bn yuan increase on top of the September level.
Shenzhen recently announced the third and final batch of land parcels for sale this year.


We see this as policy finetuning, rather than a broad easing

We see a short-term opportunity to buy high-quality, low leveraged developers in advance of further calibrated policy support.Longer-term investors are advised to look at developers with the potential of realising higher valuation by listing property management units, as has been done by other developers.



Property Developer Dollar Bond Issuances Shrink, Shenzhen Tweaks Land Auction Rules

Some developers have reportedly proposed to extend their offshore bond maturities or conduct debt restructuring at the NDRC and SAFE meeting earlier this week.Eight developers were summoned to the meeting, according to local media reports. The attendees include a mixture of overlevered and stable developers in terms of offshore debt risks, such as <a href="https://www.smartkarma.com/entities/china-vanke-co-ltd" target="_blank" data-smartkarma-citation="entities:26076:1" rel="noopener">China Vanke (000002 CH)</a> , <a href="https://www.smartkarma.com/entities/shimao-property-holdings-limited" target="_blank" data-smartkarma-citation="entities:8375:1" rel="noopener">Shimao Property Holdings (813 HK)</a> , <a href="https://www.smartkarma.com/entities/sino-ocean-land-holdings" target="_blank" data-smartkarma-citation="entities:8898:1" rel="noopener">Sino Ocean Land (3377 HK)</a> , <a href="https://www.smartkarma.com/entities/kaisa-group-holdings-ltd" target="_blank" data-smartkarma-citation="entities:169:1" rel="noopener">Kaisa Group Holdings (1638 HK)</a> ,  <a href="https://www.smartkarma.com/entities/central-china-real-estate-ltd" target="_blank" data-smartkarma-citation="entities:513:1" rel="noopener">Central China Real Estate (832 HK)</a> , and <a href="https://www.smartkarma.com/entities/oceanwide-holdings-co-ltd" target="_blank" data-smartkarma-citation="entities:14048:1" rel="noopener">Oceanwide Holdings (000046 CH)</a>
We have seen a shift in the property policy stance from comprehensive tightening to finetuning policy.

Some developers have reportedly proposed to extend their offshore bond maturities or conduct debt restructuring at the NDRC and SAFE meeting earlier this week.Eight developers were summoned to the meeting, according to local media reports. The attendees include a mixture of overlevered and stable developers in terms of offshore debt risks, such as China Vanke (000002 CH) , Shimao Property Holdings (813 HK) , Sino Ocean Land (3377 HK) , Kaisa Group Holdings (1638 HK) ,  Central China Real Estate (832 HK) , and Oceanwide Holdings (000046 CH)
We have seen a shift in the property policy stance from comprehensive tightening to finetuning policy.

Developers Said to Propose Offshore Bond Extension to Regulators

The NPCSC pushed forward with the property tax by granting the State Council authority to pilot it in certain regions for five years with the purpose to guide reasonable property consumption.
China has discussed the property tax plan and even launched pilot programs in Shanghai and Southwest China's Chongqing as early as 2011. The widening of the property pilot progamme would shake the real estates market,property-related industries, such as the steel and cement sectors. However,the tax may be neutral over the long-term for developers due to the expectation that the existing administrative controlling measures would be gradually removed after the implementation of the tax. Moreover, tax burdens would be moved from the construction stage to home transaction and holding phases, i.e. from developers to homeowners/ speculators.

The NPCSC pushed forward with the property tax by granting the State Council authority to pilot it in certain regions for five years with the purpose to guide reasonable property consumption.
China has discussed the property tax plan and even launched pilot programs in Shanghai and Southwest China's Chongqing as early as 2011. The widening of the property pilot progamme would shake the real estates market,property-related industries, such as the steel and cement sectors. However,the tax may be neutral over the long-term for developers due to the expectation that the existing administrative controlling measures would be gradually removed after the implementation of the tax. Moreover, tax burdens would be moved from the construction stage to home transaction and holding phases, i.e. from developers to homeowners/ speculators.

State Council to Pilot Property Tax in Certain Regions for Five Years

The China Real Estate Association (CREA) reportedly summoned 10 key developers to a discussion meeting last Friday, including <a href="https://www.smartkarma.com/entities/china-vanke-co-ltd" target="_blank" data-smartkarma-citation="entities:26076:1" rel="noopener">China Vanke (000002 CH)</a> , <a href="https://www.smartkarma.com/entities/sunac-china-holdings-ltd" target="_blank" data-smartkarma-citation="entities:240:1" rel="noopener">Sunac China Holdings (1918 HK)</a> , <a href="https://www.smartkarma.com/entities/china-overseas-land-investment-limited" target="_blank" data-smartkarma-citation="entities:419:1" rel="noopener">China Overseas Land &amp; Investment (688 HK)</a> , <a href="https://www.smartkarma.com/entities/gemdale-corp-a" target="_blank" data-smartkarma-citation="entities:14908:1" rel="noopener">Gemdale Corp A (600383 CH)</a> , <a href="https://www.smartkarma.com/entities/longfor-properties" target="_blank" data-smartkarma-citation="entities:8149:1" rel="noopener">Longfor Properties (960 HK)</a><a href="https://www.smartkarma.com/entities/zhongliang-holdings-group-co" target="_blank" data-smartkarma-citation="entities:28009:1" rel="noopener">Zhongliang Holdings (2772 HK)</a> , <a href="https://www.smartkarma.com/entities/seazen-holdings-co-ltd" target="_blank" data-smartkarma-citation="entities:24242:1" rel="noopener">Seazen Holdings Co., Ltd. (601155 CH)</a> , <a href="https://www.smartkarma.com/entities/greentown-china-holdings" target="_blank" data-smartkarma-citation="entities:8954:1" rel="noopener">Greentown China (3900 HK)</a> , and <a href="https://www.smartkarma.com/entities/cifi-holdings-group-co-ltd" target="_blank" data-smartkarma-citation="entities:18387:1" rel="noopener">CIFI Holdings (884 HK)</a> , who were required to send senior executives at vice president or above levels.

The China Real Estate Association (CREA) reportedly summoned 10 key developers to a discussion meeting last Friday, including China Vanke (000002 CH) , Sunac China Holdings (1918 HK) , China Overseas Land &amp; Investment (688 HK) , Gemdale Corp A (600383 CH) , Longfor Properties (960 HK)Zhongliang Holdings (2772 HK) , Seazen Holdings Co., Ltd. (601155 CH) , Greentown China (3900 HK) , and CIFI Holdings (884 HK) , who were required to send senior executives at vice president or above levels.

China Real Estate Association Summoned Key Developers as PBOC Hints Policy Finetuning

We have seen a shift in the property policy stance from comprehensive tightening to finetuning policy, which includes some significant local easing such as the raft of measures announced in Harbin as well restarted RMBS issuance that is expected to top up mortgage quotas.
Two recent PBOC meetings affirmed the importance of “healthy property market development” and protecting homebuyers’ rights. This means that policymakers want the property market to be not too hot (as it was late last year) and not too cold.
The backdrop is the Evergrande crisis, based on high liabilities and triggered by plummeting home sales, but also expected growth pressures as the pandemic continues and with power shortages.

We have seen a shift in the property policy stance from comprehensive tightening to finetuning policy, which includes some significant local easing such as the raft of measures announced in Harbin as well restarted RMBS issuance that is expected to top up mortgage quotas.
Two recent PBOC meetings affirmed the importance of “healthy property market development” and protecting homebuyers’ rights. This means that policymakers want the property market to be not too hot (as it was late last year) and not too cold.
The backdrop is the Evergrande crisis, based on high liabilities and triggered by plummeting home sales, but also expected growth pressures as the pandemic continues and with power shortages.

China

Poly Real Estate Group Co., Ltd. mainly develops and sells residential homes. The company is also in the business of leasing and rental of real estates, and property management.

Poly Real Estate Group Co., Ltd (600048 CH)

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Poly Real Estate Group Co., Ltd (600048 CH)

Property Developer Dollar Bond Issuances Shrink, Shenzhen Tweaks Land Auction Rules

We see a short-term opportunity to buy high-quality, low leveraged developers in advance of further calibrated policy support

Li Tang

Developers Said to Propose Offshore Bond Extension to Regulators

Some developers have reportedly proposed to extend their offshore bond maturities or conduct debt restructuring at the NDRC and SAFE meeting...

Li Tang

State Council to Pilot Property Tax in Certain Regions for Five Years

The widen of property tax pilot progamme would shake the real estates market,property-related industries, such as the steel and cement sectors.

Li Tang

China Real Estate Association Summoned Key Developers as PBOC Hints Policy Finetuning

We see a short-term opportunity to buy high-quality, low leveraged developers in advance of further calibrated policy support.

Li Tang

China Real Estate:Easing Builds Momentum

We have seen a shift in the property policy stance from comprehensive tightening to finetuning policy, which includes some significant local easing...

Li Tang

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52-week Range

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