JL Warren Capital

JL Warren Capital LLC is a leading independent equity research firm focused on Chinese companies and listed multinationals in China. We employ a bottom-up research approach that takes great care to avoid the acquisition of material non-public information. Through investigative due diligence including channel surveys and interviews, our research helps clients to pinpoint the dislocations in the market.

Investment Advisors

Deciphering China's July Macro Indicators

Another 8 Local Governments Announced Home Purchase Restrictions in China

Investment Advisors, JL Warren Capital

Junheng Li

Thematic (Sector/Industry)

China Real estate / Thematic (Sector/Industry)

<p>Last week, we had the opportunity to speak with policy advisors regarding the central government’s thoughts and policy planning regarding the housing market and credit policies, entering the second half of the year.   We learned that the Chinese authorities have become increasingly concerned about the housing market bubble ballooning and have mandated stricter implementation of administrative and monetary tightening policies in the past few months.  The consensus among the decision makers is that without reining in the speculative activities in the housing market both by the home buyers and developers, the stability of the economy and social stability will be greatly endangered.  Stabilizing the housing and financial market had been prioritized and elevated as a national security issue as early as December 2016. Nevertheless, pushing down the policy decision to implementation at the local levels takes a few months.  Starting in Q1 with the top SOE commercial banks -Bank of China (BOC), the China Construction Bank (CCB), the Agricultural Bank of China (ABC), and the Industrial and Commercial Bank of China (ICBC) all commercial banks, large and small, have all been strictly supervised in lending to developers and home buyers.  Specially, the authorities mandated that the net mortgage lending amount to consumers cannot grow sequentially for any bank and that the lending to developers must decelerate to curb the rising land prices and consequent housing prices.</p>

Last week, we had the opportunity to speak with policy advisors regarding the central government’s thoughts and policy planning regarding the housing market and credit policies, entering the second half of the year.   We learned that the Chinese authorities have become increasingly concerned about the housing market bubble ballooning and have mandated stricter implementation of administrative and monetary tightening policies in the past few months.  The consensus among the decision makers is that without reining in the speculative activities in the housing market both by the home buyers and developers, the stability of the economy and social stability will be greatly endangered.  Stabilizing the housing and financial market had been prioritized and elevated as a national security issue as early as December 2016. Nevertheless, pushing down the policy decision to implementation at the local levels takes a few months.  Starting in Q1 with the top SOE commercial banks -Bank of China (BOC), the China Construction Bank (CCB), the Agricultural Bank of China (ABC), and the Industrial and Commercial Bank of China (ICBC) all commercial banks, large and small, have all been strictly supervised in lending to developers and home buyers.  Specially, the authorities mandated that the net mortgage lending amount to consumers cannot grow sequentially for any bank and that the lending to developers must decelerate to curb the rising land prices and consequent housing prices.

Tightening Policies Curb Speculative Home Buyers in H2 2017