Jingu Financial News | CMB International stated that Guangzhou has further relaxed restrictions on foreigners buying houses; after canceling the price limit in the land auction market, high-level cities have heated competition while low-level cities are weaker, indicating that the market-oriented bidding mechanism will accelerate the balance of supply and demand. High-frequency data shows that the sales of new houses since early July have fallen slightly from the peak in late June, while the second-hand market is still strong. From early July to now, daily transactions of new/second-hand housing have decreased by 21%/increased by 11% respectively compared to the daily average of June. The transaction observation in first-tier cities reflects that the weekly transaction volume of new and second-hand housing in the 27th week has fallen compared to the previous week. Compared with the weekly average transaction volume this year, Shenzhen and Guangzhou have performed relatively steadily. The bank's leading index expects that the trend of narrowing sales decline in July and August may be interrupted. At the same time, the poor mid-term performance of developers may increase downward pressure on the sector, and the bank believes that the sector may continue to fluctuate in July and August.
In the medium and long term, considering the good policy prospects, the strengthening of implementation, and the positive signs of land auctions and sales, the bank believes that the sector will maintain a repair trend in the medium and long term. In terms of stock selection, the bank favors the beneficiaries of the stock market's property management companies China Resources Mixc (01209), Poly Property Services (06049), Binjiang Service (03316), and Vanke Cloud (02602), as well as the intermediary platform Ke Holdings (BEKE US), the construction company Greentown Management (09979), and China Resources Land (01109), which has long-term holding value among the developers.