20230320-招银国际-Property+_Weekly__Sales_continued_to_cheer_up_the_market_6页_917kb

China Property Sector Summary

Core Content

The China property sector is currently showing signs of recovery, with property sales continuing to improve and market confidence strengthening. The latest high-frequency data indicates a positive trend in both new and secondary home sales, supported by policy measures such as the recent RRR cut and guidance from BEKE. The sector is expected to maintain positive sales growth in March through May, which presents a good opportunity for investors to capitalize on better-than-expected data and invest in quality names.

Main Views

• New Home Sales:

  • Reported a strong week with a +9% WoW increase and +35% YoY growth for March MTD.
  • Year-to-date (YTD) decline narrowed to -4% YoY, showing improvement.
  • Tier 3 cities drove much of the growth, with +16% WoW and +41% YoY for March MTD.
  • Tier 1 & 2 cities also showed solid performance, with +7% WoW and +33% YoY for March MTD.

• Secondary Home Sales:

  • Slightly decreased -4% WoW, but MTD in March and YTD growth were still strong at +83% / +52% YoY.
  • The analyst believes the WoW correction is normal and does not signal a long-term decline, as the market is returning to a standard level after a strong peak in early February.

• Sales Outlook:

  • Sales are expected to remain positive in March-May due to:
    1. Strong leading indicators pointing to a promising March.
    2. Seasonal high months for project launches in March and April.
    3. A low base in April and May due to lockdowns in 2022.
    4. Continued implementation of supportive policies on both demand and financing sides.

Key Information

• Cement Prices:

  • National cement price rose +2% WoW and +4% MoM to RMB471/mt as of 15 Mar.
  • Storage ratio increased to 63% (+2ppt from previous week).
  • Price recovery is uneven across regions, with the south and east seeing stronger demand than the north and southwest.

• Steel Rebar Prices:

  • Rebar price increased +1% WoW and +3% MoM to RMB4,417/mt as of 15 Mar.
  • Strong sales momentum has driven demand, with large size rebar seeing more orders, confirming the positive impact on the upstream supply chain.

• Other Materials:

  • Aluminum price remained stable at RMB18,310/mt.
  • Float glass price increased +2% WoW last week.
  • The analyst believes the strong sales recovery will continue to spread to the upper stream, potentially driving up prices for related materials.

Recommended Stocks

• CR Land
• Yuexiu
• Binjiang
• Huafa
• BEKE

CMBIGM Ratings

• OUTPERFORM: Industry expected to outperform the relevant broad market benchmark over the next 12 months.

Disclosures

• The report is prepared for informational purposes only and does not constitute investment advice.
• CMBIGM does not provide individually tailored investment advice.
• The value of investments is uncertain and may fluctuate.
• The report may be subject to legal restrictions depending on the recipient's location (UK, US, Singapore).

Disclaimer

• The analyst certifies that the views expressed reflect personal opinions and that there is no direct or indirect compensation related to the views.
• The analyst confirms no trading activity in the stocks covered within 30 days prior to the report and will not engage in any such activity within 3 business days after the report's release.
• The information is based on publicly available data and is not guaranteed for accuracy or completeness.
• The report is for the intended recipients only and may not be reproduced or distributed without prior written consent.