Hong Kong Stock Concept Tracking | The State Council Information Office will hold a press conference on promoting the stable and healthy development of the real estate market Valuation repair continues in the real estate sector (with concept stocks)

The State Council Information Office will hold a press conference at 10:00 am on Thursday, October 17, 2024, to introduce the relevant situation of promoting the stable and healthy development of the real estate market by Minister of Housing and Urban-Rural Development Ni Hong, as well as officials from the Ministry of Finance, Ministry of Natural Resources, People's Bank of China, and China Banking and Insurance Regulatory Commission, and answer questions from reporters.

After setting a new record for sales during the National Day holiday, many real estate companies have seized the opportunity. For example, recently launched properties have also achieved remarkable results. At the same time, there have been reports of new properties selling out immediately in many regions. Looking at real-time transaction data and online signing data in the property market, the daily signing volume in first and second-tier cities continues to hit new highs, boosting residents' confidence in home buying. Looking ahead, many industry insiders believe that recent multiple positive factors have significantly increased market activity, residents' confidence in home buying is steadily recovering, new policies are expected to continue to show results, and the process of stabilizing the real estate market is expected to accelerate.

GF Securities released a research report stating that as of October 6, 2024, the national four restriction policy index has dropped to a historic low, and future policy relaxation space will mainly focus on high-energy cities. The current policy intensity has significantly increased, and the fundamentals after the new policy (during the National Day holiday) are strong, with the fourth quarter having both sustained policy expectations and opportunities to verify the impact of policies on fundamentals. Under the current policy intensity, it is expected that the overall market value repair trend of real estate companies may refer to 1xNAV in the medium term, which is equivalent to an average of 1.4xPB, and it is recommended to increase the allocation of the real estate sector.

EB Securities' research report pointed out that the Fed's interest rate cut cycle has begun, domestic real estate policies continue to be optimized, property management risk factors are gradually being cleared, and the value of sector allocation is highlighted. It is recommended to focus on three main themes:

1. "Valuation Repair": Focus on the reduction of risk premiums brought by the warming liquidity in the real estate industry and the gradual clearance of credit risks of private real estate companies.

2. "Balanced Development": Long-term optimism for property management companies with strong independent development capabilities, high project quality, strong operational and profit-making capabilities.

3. "Stable State-owned Enterprises": The stable development of state-owned property management companies and low risk bring valuation premiums.

Real estate related industry chain companies:

China Overseas Development (00688), Country Garden Holdings (01908), Yuexiu Property (00123), Greenland Hong Kong (03900), Sunac China Holdings (01918), Longfor Group (00960), Greentown China (03377), Vanke (02202), China Resources Land (01109), and Agile Group (00884), etc.;

Property management companies: CR Vanguard Living (01209), Poly Property Services (06049), China Overseas Property (02669), Midea Real Estate (03990), etc.

Real estate agencies: Beike-W (02423), Country Garden Services (06098)