Founder-CEO & Chief Analyst, Real Estate Foresight

Robert Ciemniak

Founder-CEO & Chief Analyst

Real Estate Foresight

Since 2012, REF has been helping investors with market research, project due diligence, and strategy development. This has ranged from detailed assessments and estimates on distressed developers' project portfolios to market due diligence on specific projects to macro-level questions linked to demand for commodities. The unique combination of the housing markets and developer data from data partner China Index Academy in Beijing, primary research, and technology-powered alternative data collection from public sources result in a valuable content set used in REF analytics and reports.

Predictive Analytics for China Property

Thematic (Sector/Industry)

<ul>
<li>Today's NBS data for September points to further weakening in the housing market year-to-date year-on-year while turning less negative on most indicators on a 12M rolling basis</li>
<li>It's in line with our forecast from Dec 2022 data, and also consistent with what the weekly data suggested earlier</li>
<li>But the main caveat persists - the 2022 data (May-Sep) continued to be revised down (officially) for some key metrics like new home sales</li>
</ul>


Today's NBS data for September points to further weakening in the housing market year-to-date year-on-year while turning less negative on most indicators on a 12M rolling basis
It's in line with our forecast from Dec 2022 data, and also consistent with what the weekly data suggested earlier
But the main caveat persists - the 2022 data (May-Sep) continued to be revised down (officially) for some key metrics like new home sales


China Property - Today's NBS Macro-Property Data for September 2023

Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>A better week for HK stocks as A-shares rebound on National Team buying, a PBOC RRR cut, and potentially other measures to boost the market. Foreigners stopped selling; that helped.</li>
<li>Southbound saw decent net buying on ETFs late in the week, but otherwise the week was pretty flat in single-stock land - net buying of SOEs, selling of tech.</li>
<li>Net SOUTHBOUND buying was HK$4.5bn on the week, mostly through Shanghai (interestingly, 90+% of the decent NORTHBOUND buy was also through Shanghai). </li>
</ul>


A better week for HK stocks as A-shares rebound on National Team buying, a PBOC RRR cut, and potentially other measures to boost the market. Foreigners stopped selling; that helped.
Southbound saw decent net buying on ETFs late in the week, but otherwise the week was pretty flat in single-stock land - net buying of SOEs, selling of tech.
Net SOUTHBOUND buying was HK$4.5bn on the week, mostly through Shanghai (interestingly, 90+% of the decent NORTHBOUND buy was also through Shanghai). 


HK Connect SOUTHBOUND Flows (To 26 Jan 2024); ETFs and High Div SOEs Again BIG Buys, Tech Sold

Listed Real Estate Asia, KT Capital Group

Jacob Cheng

Listed Real Estate Asia

KT Capital Group

Principal investments and advisory firm that focuses on connecting the CIS countries with East Asia.

Principal investments and advisory firm

<ul>
<li>20 Trillion RMB Vaporized: Wealth evaporated via marginal pricing. Physical cash is permanently trapped in non-yielding municipal concrete, structurally destroying the foundation of middle-class retail consumption.</li>
<li>The Full-Recourse Trap: Draconian mortgage laws and severe social blacklists force panicked household deleveraging, locking China into a permanent deflationary balance sheet recession with no exit mechanism.</li>
<li>SHORT Longfor Group (960 HK): The private survivor is a value trap masking negative development margins, shrinking cash flows, and severe exposure to a retail consumption downgrade.</li>
</ul>


20 Trillion RMB Vaporized: Wealth evaporated via marginal pricing. Physical cash is permanently trapped in non-yielding municipal concrete, structurally destroying the foundation of middle-class retail consumption.
The Full-Recourse Trap: Draconian mortgage laws and severe social blacklists force panicked household deleveraging, locking China into a permanent deflationary balance sheet recession with no exit mechanism.
SHORT Longfor Group (960 HK): The private survivor is a value trap masking negative development margins, shrinking cash flows, and severe exposure to a retail consumption downgrade.


Anatomy of an Implosion: Recourse Traps, Capital Destruction & The Longfor Short

<ul>
<li>Historic Wealth Erasure: The property downturn vaporized 20 trillion RMB in household equity, trapping the middle class in negative equity and severely freezing discretionary spending across consumer tiers.</li>
<li>Broad Demand Deterioration: Surging youth unemployment, widespread wage cuts, and a classic balance sheet recession are neutralizing stimulus efforts and decimating aggregate retail footfall.</li>
<li>The Structural Shift: Plunging turnover rents and rising vacancies leave retail landlords Hang Lung (101 HK) and Longfor (960 HK) structurally vulnerable amid shifting consumption patterns and evaporating luxury demand.</li>
</ul>


Historic Wealth Erasure: The property downturn vaporized 20 trillion RMB in household equity, trapping the middle class in negative equity and severely freezing discretionary spending across consumer tiers.
Broad Demand Deterioration: Surging youth unemployment, widespread wage cuts, and a classic balance sheet recession are neutralizing stimulus efforts and decimating aggregate retail footfall.
The Structural Shift: Plunging turnover rents and rising vacancies leave retail landlords Hang Lung (101 HK) and Longfor (960 HK) structurally vulnerable amid shifting consumption patterns and evaporating luxury demand.


The 20 Trillion RMB Property Wealth Erosion and Its Impact on China's Structural Retail Slowdown

Senior Credit Analyst, Lucror Analytics

Leonard Law, CFA

Senior Credit Analyst

High Yield Experts

Lucror Analytics

Lucror Analytics is a leading credit and ESG research specialist and a provider of technology solutions for differentiated fixed income strategies. Our roots are in bottom-up fundamental credit analysis with a specialization in high yield corporate credits from Europe, Asia and Latin America. We are one of few research specialists integrating ESG considerations with fundamental credit research through a dedicated ESG platform. Our ESG assessment covers five key criteria: Disclosure, E,S, & G Pillars, Controversies, ESG Impact on Credit and ESG Momentum.

Recognizing the importance and value-add of Factor Investing in fixed income, Lucror developed the Smart Quant Navigator (SQN), an intuitive platform that helps clients devise and implement factor-based strategies ranging from pure quant to active fundamental, with integrated ESG.

Our company has been at the forefront of developments in the fixed income markets, identifying opportunities and consistently delivering new products and value-adding solutions to clients. Lucror has close relationships with the largest and most reputable asset managers, family offices, hedge funds, investment and wealth managers globally.

Credit

<ul>
<li>UST yields climbed 2-4 bps across the curve yesterday, partly unwinding the yield declines in the prior two days.</li>
<li>The UST curve bear steepened, with the yield on the 2Y UST rising 2 bps to 3.76%, while that on the 10Y UST was up 4 bps at 4.29%.</li>
<li>Equities advanced, with the S&amp;P 500 increasing by 0.8% to close at a record high of 7,023. </li>
</ul>


UST yields climbed 2-4 bps across the curve yesterday, partly unwinding the yield declines in the prior two days.
The UST curve bear steepened, with the yield on the 2Y UST rising 2 bps to 3.76%, while that on the 10Y UST was up 4 bps at 4.29%.
Equities advanced, with the S&amp;P 500 increasing by 0.8% to close at a record high of 7,023. 


China

Longfor Group Holdings Ltd. is an investment holding company primarily engaged in property development, investment property operation, and services. It develops and sells residential, office, and commercial properties, and leases shopping malls and rental housing. The company also provides property management, hotel operation, commercial investment, and smart construction services. Longfor Group was founded in 1993 and is headquartered in Beijing, China.

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Longfor (960 HK)

China Property - Today's NBS Macro-Property Data for September 2023

We slice and dice various metrics for China 'macro-property' data with today's NBS release of the new data for September 2023.

Robert Ciemniak

HK Connect SOUTHBOUND Flows (To 26 Jan 2024); ETFs and High Div SOEs Again BIG Buys, Tech Sold

SOUTHBOUND flows were positive on the week but most of the net buying was in the big two ETFs. The trend of buying low PER high div SOEs continues....

Travis Lundy

Anatomy of an Implosion: Recourse Traps, Capital Destruction & The Longfor Short

20 Trillion RMB Vaporized: Wealth evaporated. Physical cash is permanently trapped in non-yielding municipal concrete, structurally destroying the...

Jacob Cheng

The 20 Trillion RMB Property Wealth Erosion and Its Impact on China's Structural Retail Slowdown

Historic Wealth Erosion: The property downturn vaporized 20 trn RMB in household equity, trapping the middle class in negative equity and freezing...

Jacob Cheng

Lucror Analytics - Morning Views Asia

The UST curve bear steepened, with the yield on the 2Y UST rising 2 bps to 3.76%, while that on the 10Y UST was up 4 bps at 4.29%.

Lucror Analytics

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