M. Stanley Predicts Minimal Impact from China's Home Swap Tax Rebate; Residents Continue to Feel Negative About Home Prices
New Tax Refund Policy: China's Ministry of Finance announced a policy allowing tax refunds for individuals who buy a new home within a year of selling their property between 2026 and 2027.
Limited Market Impact: Morgan Stanley's research indicates that this measure will have limited effect on the property market, as prices have already dropped significantly and homeowners are facing negative equity.
Pessimistic Outlook: Residents' negative sentiment towards property prices and reluctance to invest further are expected to hinder any substantial increase in demand from this policy.
Need for Confidence Restoration: The report emphasizes that restoring confidence in income and property values through significant fiscal support is crucial for reversing the long-term decline in the property market.
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Daiwa Reveals Top A/H Stock Selections (Table)
Daiwa Report on Stock Picks: Daiwa released a report highlighting top picks in the H- and A-share markets, including notable companies like Tencent, Alibaba, and Kweichow Moutai, with varying short selling ratios.
Stock Performance Overview: The report details the performance of several stocks, with Tencent and Alibaba experiencing declines, while Naura and Kweichow Moutai showed gains.
Daiwa Maintains Positive Perspective on Chinese Market, Names LAOPU GOLD and KINGSOFT CLOUD as Preferred Selections
GDP Target Insights: Daiwa estimates an implied national GDP target of 5% for China in 2026, suggesting a more conservative official target of 4.5-4.7%, with potential economic stimulus measures expected following the "Two Sessions" on March 5.
Market Outlook: Despite recent market turmoil, Daiwa maintains an optimistic outlook for the Chinese stock market in the first half of 2026, anticipating that gradual stimulus measures could enhance investment sentiment.
Top Stock Picks: Daiwa has updated its top stock picks to include LAOPU GOLD and KINGSOFT CLOUD, driven by strong downstream demand and price increase expectations, replacing previous picks SHENZHOU INTL and TRIP.COM.
Short Selling Data: The report includes short selling data for various stocks, indicating significant short selling activity in LAOPU GOLD and KINGSOFT CLOUD, reflecting market sentiment and trading strategies.
China Real Estate Land January Contract Sales Steady Year-on-Year at RMB 11.65 Billion, Rental Income Rises 13.7%
Sales Performance: In January 2026, CHINA RES LAND reported gross contracted sales of approximately RMB11.65 billion, reflecting a slight increase of 0.4% year-on-year, despite a significant drop of 24.6% in contracted gross floor area (GFA) to around 368,000 square meters.
Recurring Revenue Growth: The group's recurring revenue reached around RMB4.51 billion, marking an 8.7% increase year-on-year, with rental income from investment properties contributing RMB3.11 billion, up 13.7% year-on-year.
<Daily Summary> HSI Ends at 26,847, Gaining 12 Points; HSTI Finishes at 5,366, Dropping 100 Points; TENCENT Falls More Than 3%; XINYI GLASS, TECHTRONIC IND, CHINA RES MIXC, WHARF REIC, MTR CORPORATION Reach New Peaks; Market Turnover Increases
Market Performance: The Hang Seng Index (HSI) rose slightly by 12 points to close at 26,847, while the Hang Seng Tech Index (HSTI) and the Hang Seng China Enterprises Index (HSCEI) fell by 100 points and 4 points, respectively, with a total market turnover of $285.43 billion.
Active Heavyweights: Major stocks like Tencent, Xiaomi, and Meituan experienced declines, with Tencent dropping 4% to close at $558, while other heavyweights also saw significant short selling activity.
Notable Movers: Trip.com saw a significant drop of 6.1%, while Xinyi Glass and China Shenhua recorded gains of 5.9% and 5.7%, respectively, with several stocks hitting new highs.
Short Selling Trends: Various stocks experienced notable short selling, with Techtronic Industries and China Resources Mixc among those hitting new highs, while others like Kingdee International and Meitu faced substantial declines.
Midday Update: HSI Ends at 26,724, Down 109 Points; HSTI at 5,347, Down 119 Points; TENCENT Falls Over 3%; XINYI GLASS, TECHTRONIC IND, WHARF REIC, YANKUANG ENERGY, and CHINA EAST AIR Reach New Highs
Market Performance: The HSI dropped 109 points (0.4%) to 26,724, while the HSTI fell 119 points (2.2%) to 5,347, and the HSCEI decreased by 48 points (0.5%) to 9,004.
Active Heavyweights: Major stocks like TENCENT, XIAOMI, and MEITUAN saw declines, with TENCENT down 3.4% and XIAOMI down 2.6%, while BABA fell 0.9%.
Notable Movers: XINYI GLASS and CHINA SHENHUA experienced significant gains, with XINYI GLASS up 6.2% and CHINA SHENHUA up 5.4%, while TRIP.COM-S dropped 6.1%.
Short Selling Trends: High short selling ratios were observed in several stocks, including XIAOMI (20.155%) and MEITUAN (17.261%), indicating increased bearish sentiment among investors.
<M Stanley Predicts Greater Drop in Q1 Sales for CN Property Developers>
Decline in Property Sales: Major Chinese property developers experienced a 32% year-on-year decline in contract sales in January, influenced by weak buyer confidence and increased inventory.
Future Sales Outlook: Morgan Stanley predicts further deterioration in sales for Chinese property developers in the first quarter of 2026 due to passive policy implementation and a high base effect.
Optimism for Quality Companies: Despite the overall market challenges, Morgan Stanley remains optimistic about companies with strong self-rescue capabilities, such as CHINA RES LAND and SEAZEN HOLDINGS.
Favorable View on C&D INTL GROUP: The report highlights C&D INTL GROUP as a consolidator in the residential market, noting its optimized land reserves could support profit margins and lead to earnings growth.
Daiwa Reveals Top A/H Stock Selections (Table)
Daiwa Report on Stock Picks: Daiwa released a report highlighting top picks in the H- and A-share markets, including notable companies like Tencent, Alibaba, and Kweichow Moutai, with varying short selling ratios.
Stock Performance Overview: The report details the performance of several stocks, with Tencent and Alibaba experiencing declines, while Naura and Kweichow Moutai showed gains.
Daiwa Maintains Positive Perspective on Chinese Market, Names LAOPU GOLD and KINGSOFT CLOUD as Preferred Selections
GDP Target Insights: Daiwa estimates an implied national GDP target of 5% for China in 2026, suggesting a more conservative official target of 4.5-4.7%, with potential economic stimulus measures expected following the "Two Sessions" on March 5.
Market Outlook: Despite recent market turmoil, Daiwa maintains an optimistic outlook for the Chinese stock market in the first half of 2026, anticipating that gradual stimulus measures could enhance investment sentiment.
Top Stock Picks: Daiwa has updated its top stock picks to include LAOPU GOLD and KINGSOFT CLOUD, driven by strong downstream demand and price increase expectations, replacing previous picks SHENZHOU INTL and TRIP.COM.
Short Selling Data: The report includes short selling data for various stocks, indicating significant short selling activity in LAOPU GOLD and KINGSOFT CLOUD, reflecting market sentiment and trading strategies.
China Real Estate Land January Contract Sales Steady Year-on-Year at RMB 11.65 Billion, Rental Income Rises 13.7%
Sales Performance: In January 2026, CHINA RES LAND reported gross contracted sales of approximately RMB11.65 billion, reflecting a slight increase of 0.4% year-on-year, despite a significant drop of 24.6% in contracted gross floor area (GFA) to around 368,000 square meters.
Recurring Revenue Growth: The group's recurring revenue reached around RMB4.51 billion, marking an 8.7% increase year-on-year, with rental income from investment properties contributing RMB3.11 billion, up 13.7% year-on-year.
<Daily Summary> HSI Ends at 26,847, Gaining 12 Points; HSTI Finishes at 5,366, Dropping 100 Points; TENCENT Falls More Than 3%; XINYI GLASS, TECHTRONIC IND, CHINA RES MIXC, WHARF REIC, MTR CORPORATION Reach New Peaks; Market Turnover Increases
Market Performance: The Hang Seng Index (HSI) rose slightly by 12 points to close at 26,847, while the Hang Seng Tech Index (HSTI) and the Hang Seng China Enterprises Index (HSCEI) fell by 100 points and 4 points, respectively, with a total market turnover of $285.43 billion.
Active Heavyweights: Major stocks like Tencent, Xiaomi, and Meituan experienced declines, with Tencent dropping 4% to close at $558, while other heavyweights also saw significant short selling activity.
Notable Movers: Trip.com saw a significant drop of 6.1%, while Xinyi Glass and China Shenhua recorded gains of 5.9% and 5.7%, respectively, with several stocks hitting new highs.
Short Selling Trends: Various stocks experienced notable short selling, with Techtronic Industries and China Resources Mixc among those hitting new highs, while others like Kingdee International and Meitu faced substantial declines.
Midday Update: HSI Ends at 26,724, Down 109 Points; HSTI at 5,347, Down 119 Points; TENCENT Falls Over 3%; XINYI GLASS, TECHTRONIC IND, WHARF REIC, YANKUANG ENERGY, and CHINA EAST AIR Reach New Highs
Market Performance: The HSI dropped 109 points (0.4%) to 26,724, while the HSTI fell 119 points (2.2%) to 5,347, and the HSCEI decreased by 48 points (0.5%) to 9,004.
Active Heavyweights: Major stocks like TENCENT, XIAOMI, and MEITUAN saw declines, with TENCENT down 3.4% and XIAOMI down 2.6%, while BABA fell 0.9%.
Notable Movers: XINYI GLASS and CHINA SHENHUA experienced significant gains, with XINYI GLASS up 6.2% and CHINA SHENHUA up 5.4%, while TRIP.COM-S dropped 6.1%.
Short Selling Trends: High short selling ratios were observed in several stocks, including XIAOMI (20.155%) and MEITUAN (17.261%), indicating increased bearish sentiment among investors.
<M Stanley Predicts Greater Drop in Q1 Sales for CN Property Developers>
Decline in Property Sales: Major Chinese property developers experienced a 32% year-on-year decline in contract sales in January, influenced by weak buyer confidence and increased inventory.
Future Sales Outlook: Morgan Stanley predicts further deterioration in sales for Chinese property developers in the first quarter of 2026 due to passive policy implementation and a high base effect.
Optimism for Quality Companies: Despite the overall market challenges, Morgan Stanley remains optimistic about companies with strong self-rescue capabilities, such as CHINA RES LAND and SEAZEN HOLDINGS.
Favorable View on C&D INTL GROUP: The report highlights C&D INTL GROUP as a consolidator in the residential market, noting its optimized land reserves could support profit margins and lead to earnings growth.
