Equity Research in HK and Mainland China

Li Tang

Highly experienced sell-side analyst with more than ten years of experience in the field of China’s in-depth policy-driven macro research in China (Beijing) .
Covering in equity research in HK and Mainland market mainly real estate, construction,steel sector.
The Ideas generation based on an analysis of China’s future direction and policy decisions fundamental analysis on sector impact, market drivers, timing and scale, combined with quantitative analysis.

China Property Weekly: Housing Sales Recovered in May Day Holiday,Land Purchase Activities Rebounded

Thematic (Sector/Industry)

Macau Real estate management and development / Thematic (Sector/Industry)

We expect further loosening to be ratcheted up by China central government as needed to offset economic pressures as the pandemic continues. The potential policy may include down-payment cuts, relaxing purchase restrictions or even interest rate cuts that can be deployed to boost the property market if and when needed. Any easing will be carefully measured to avoid a major leveraging up of the real estate, however.
We anticipate the moderate monetary loosening policies coming perhaps within the next week or two around the National People Congress meeting (exact dates does not yet to be released) likely to benefit the property sales in May. Developers traditionally increase the supply of new units and offer discounts towards the labour Festival (1-5 May). As more developers begin to offer price discounts ahead of Labour Festival holiday, it may help to drive transaction volumes as well. Property transaction volumes in 30 survey cities are also showing a trend improved as continued policy support releases pent-up end-user demand. 
More cities indicated their intention to loosen property policy last week and property transaction volumes increased on wow basis. However, the majority of cities still saw property transaction volumes decline on a YoY basis in the fourth week of April. We believe we will see more local governments begin to test the limits of permitted easing and the process conduct by the central government, which should lead to higher transaction volumes coming into H2.

We expect further loosening to be ratcheted up by China central government as needed to offset economic pressures as the pandemic continues. The potential policy may include down-payment cuts, relaxing purchase restrictions or even interest rate cuts that can be deployed to boost the property market if and when needed. Any easing will be carefully measured to avoid a major leveraging up of the real estate, however.
We anticipate the moderate monetary loosening policies coming perhaps within the next week or two around the National People Congress meeting (exact dates does not yet to be released) likely to benefit the property sales in May. Developers traditionally increase the supply of new units and offer discounts towards the labour Festival (1-5 May). As more developers begin to offer price discounts ahead of Labour Festival holiday, it may help to drive transaction volumes as well. Property transaction volumes in 30 survey cities are also showing a trend improved as continued policy support releases pent-up end-user demand. 
More cities indicated their intention to loosen property policy last week and property transaction volumes increased on wow basis. However, the majority of cities still saw property transaction volumes decline on a YoY basis in the fourth week of April. We believe we will see more local governments begin to test the limits of permitted easing and the process conduct by the central government, which should lead to higher transaction volumes coming into H2.

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

China Merchants Shekou Industr (001979 CH)

China Property Weekly: Sales Rise on Signs of Government Support