20231116-招银国际-NBS_Oct_data_in_line,_Nov-Dec_may_continue_to_be_weak_on_low_buying_sentiment_4页_708kb

China Property Sector Update Summary

Key Findings

• NBS data for October 2023 showed property investment declining by -11.3% YoY, aligning with market expectations, and property sales weakening with a monthly decrease in volume and value, exacerbated by a divergence between high-tier and low-tier cities.
• The buying sentiment remains low, leading to weak performance in November-December 2023, with sales expected to decline further due to marginally weakening policy effects, despite ongoing relaxation efforts.
• The property market may not exhibit a strong rebound in 2024 due to: (1) regula-tors valuing stability over growth, hindering the recreation of strong buying sentiment like in early 2023; (2) continuing liquidity pressure from developers due to debt defaults and extensions; and (3) reduced land acquisition in 2023, limiting high-quality saleable inventory.

Stock Recommendations

• Prioritize property agents: BEKE; management firms: Greentown Mgmt., CR MixC, COPH, Poly Services, Onewo, and Yuexiu Services; developers: CR Land, Yuexiu Property, and Binjiang Group.

Outlook for 2024

• China's property sector is expected to underperform in 2024, with a muted recovery outlook driven by elevated stability concerns and persistent developer challenges.