BofAS Predicts Stricter Chinese Property Regulations by March/April, Prefers CR Land and COLI
BofA Securities' Positive Outlook: BofA Securities maintains a non-consensus positive view on the Chinese real estate industry, anticipating proactive policy-making that could create investment opportunities despite current pressures and low investor positioning.
Preferred Companies: The report favors companies with strong execution capabilities, including CHINA RES LAND, CHINA OVERSEAS, and C&D INTL GROUP, while also expecting CHINA RES MIXC to benefit from consumer stimulus measures.
Earnings Forecast Adjustments: BofA lowered its median EPS forecast for Chinese property developers by 8% for 2025-27, projecting a 20% decline in 2025 earnings, with a weaker-than-expected rebound anticipated in 2027.
Target Price Reductions: Due to downbeat prospects, BofA cut its target price for Chinese property developers by 12%, maintaining an Underperform rating for several companies, including CG SERVICES and POLY DEVELOPMENTS.
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HSI Gains 12 Points, Yet Software Stocks and Dotcoms Decline; Coal and Chinese Developers Surge
Market Performance: The HSI closed slightly up at 26,847, while the HSCEI and HSTECH saw minor declines, with total market turnover dropping to $285.433 billion.
Sector Struggles: Software and dotcom sectors faced significant losses, with major companies like TENCENT and MEITU experiencing declines of 3.96% and 11.4%, respectively.
Resource Stocks Rise: Gold and silver prices rebounded, with companies like CHINAGOLDINTL and ZHAOJIN MINING seeing gains, while coal stocks like YANKUANG ENERGY surged by over 10%.
Financial Sector Movements: HSBC and AIA saw slight increases, while HKEX experienced a minor decline; Chinese property developers generally performed well, with several stocks rising between 5% and 10%.
<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.
CICC Anticipates Continued Pressure on CN Developers' 2025 Earnings; CHINA RES LAND, CHINA OVERSEAS, and C&D INTL GROUP Maintain Significant Profit Levels
Earnings Forecast: China's real estate sector is expected to see a significant decline in earnings for covered companies in 2025, with firms like CHINA RES LAND, CHINA OVERSEAS, and C&D INTL GROUP projected to experience a 15-20% year-on-year decrease.
Market Sentiment: Despite the anticipated earnings drop, CICC maintains a positive outlook on the real estate sector for 2023, suggesting potential for positive returns and good value in stock selection for 2026.
Company Performance: Some companies, including GREENTOWN CHINA and YUEXIU PROPERTY, may report marginal profits, while others like LONGFOR GROUP and URBAN CONS DEV could face slight losses, with a few firms expected to see steady core profits.
Stock Ratings: CICC has kept its ratings and target prices unchanged for various Chinese developers, highlighting stocks such as BINJIANG GP and SEAZEN HOLDINGS as outperformers in the market.
G Sachs: Liquidity Support Continues to Be Key Factor for Short-Term Share Price Recovery in China's Real Estate Market
Regulatory Changes: Recent reports indicate that Chinese developers have confirmed the suspension of the monthly 'Three Red Lines' indicator data submission, which was reportedly halted a year ago.
Market Reaction: The news has positively impacted the Chinese property sector, suggesting that liquidity injection is a key factor driving short-term share price recovery, despite ongoing challenges in housing demand.
Goldman Sachs Ratings: Goldman Sachs has maintained a 'Buy' rating for several Chinese real estate companies, including CHINA RES LAND and GREENTOWN CHINA, amidst the evolving market conditions.
Short Selling Data: The article provides short selling statistics for various Hong Kong stocks, highlighting significant short selling activity in companies like CHINA OVERSEAS and GREENTOWN CHINA.
Fitch Reaffirms CH OVS G OCEANS 'BBB' Long-Term Foreign-Currency Issuer Default Rating with Stable Outlook
Fitch Rating Affirmation: Fitch has affirmed CH OVS G OCEANS' Long-Term Foreign-Currency Issuer Default Rating at "BBB" with a Stable Outlook, and assigned the same rating to its proposed senior unsecured notes and dim sum bonds.
Comparison with Parent Company: The rating for CH OVS G OCEANS is lower than the Standalone Credit Profile of its parent company, CHINA OVERSEAS, which is rated "BBB+" due to CH OVS G OCEANS' limited scale and lower significance in national housing construction goals.
HSI Gains 12 Points, Yet Software Stocks and Dotcoms Decline; Coal and Chinese Developers Surge
Market Performance: The HSI closed slightly up at 26,847, while the HSCEI and HSTECH saw minor declines, with total market turnover dropping to $285.433 billion.
Sector Struggles: Software and dotcom sectors faced significant losses, with major companies like TENCENT and MEITU experiencing declines of 3.96% and 11.4%, respectively.
Resource Stocks Rise: Gold and silver prices rebounded, with companies like CHINAGOLDINTL and ZHAOJIN MINING seeing gains, while coal stocks like YANKUANG ENERGY surged by over 10%.
Financial Sector Movements: HSBC and AIA saw slight increases, while HKEX experienced a minor decline; Chinese property developers generally performed well, with several stocks rising between 5% and 10%.
<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.
CICC Anticipates Continued Pressure on CN Developers' 2025 Earnings; CHINA RES LAND, CHINA OVERSEAS, and C&D INTL GROUP Maintain Significant Profit Levels
Earnings Forecast: China's real estate sector is expected to see a significant decline in earnings for covered companies in 2025, with firms like CHINA RES LAND, CHINA OVERSEAS, and C&D INTL GROUP projected to experience a 15-20% year-on-year decrease.
Market Sentiment: Despite the anticipated earnings drop, CICC maintains a positive outlook on the real estate sector for 2023, suggesting potential for positive returns and good value in stock selection for 2026.
Company Performance: Some companies, including GREENTOWN CHINA and YUEXIU PROPERTY, may report marginal profits, while others like LONGFOR GROUP and URBAN CONS DEV could face slight losses, with a few firms expected to see steady core profits.
Stock Ratings: CICC has kept its ratings and target prices unchanged for various Chinese developers, highlighting stocks such as BINJIANG GP and SEAZEN HOLDINGS as outperformers in the market.
G Sachs: Liquidity Support Continues to Be Key Factor for Short-Term Share Price Recovery in China's Real Estate Market
Regulatory Changes: Recent reports indicate that Chinese developers have confirmed the suspension of the monthly 'Three Red Lines' indicator data submission, which was reportedly halted a year ago.
Market Reaction: The news has positively impacted the Chinese property sector, suggesting that liquidity injection is a key factor driving short-term share price recovery, despite ongoing challenges in housing demand.
Goldman Sachs Ratings: Goldman Sachs has maintained a 'Buy' rating for several Chinese real estate companies, including CHINA RES LAND and GREENTOWN CHINA, amidst the evolving market conditions.
Short Selling Data: The article provides short selling statistics for various Hong Kong stocks, highlighting significant short selling activity in companies like CHINA OVERSEAS and GREENTOWN CHINA.
Fitch Reaffirms CH OVS G OCEANS 'BBB' Long-Term Foreign-Currency Issuer Default Rating with Stable Outlook
Fitch Rating Affirmation: Fitch has affirmed CH OVS G OCEANS' Long-Term Foreign-Currency Issuer Default Rating at "BBB" with a Stable Outlook, and assigned the same rating to its proposed senior unsecured notes and dim sum bonds.
Comparison with Parent Company: The rating for CH OVS G OCEANS is lower than the Standalone Credit Profile of its parent company, CHINA OVERSEAS, which is rated "BBB+" due to CH OVS G OCEANS' limited scale and lower significance in national housing construction goals.
