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>In this note, we look at the latest May/June data, policy, and sentiment in China housing markets, with some reflections on where things are vs the expectations end of 2024. </li>
<li>"Less negative" summarises the data, while "Stabilise it" captures the policy approach.</li>
<li>New home sales are in line with our forecast, and in the upper range of group forecasts from China Property Outlook, but there are some new data caveats.</li>
</ul>


In this note, we look at the latest May/June data, policy, and sentiment in China housing markets, with some reflections on where things are vs the expectations end of 2024. 
"Less negative" summarises the data, while "Stabilise it" captures the policy approach.
New home sales are in line with our forecast, and in the upper range of group forecasts from China Property Outlook, but there are some new data caveats.


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

Equity Bottom-Up

<ul>
<li>Besides COLI, we also like CRL, being another SOE play (no bankruptcy risk), with dual growth engine from residential development business and shopping mall business</li>
<li>Major share price drivers includes its contract sales trend, retail sales, rental performance as well as property policy from government</li>
<li>CRL is trading HKD30, there is no placement risk until it trades at HKD HKD39 (P/B =1x).  We recommend buying if stock trades &lt;HKD35 as a technical indicator</li>
</ul>


Besides COLI, we also like CRL, being another SOE play (no bankruptcy risk), with dual growth engine from residential development business and shopping mall business
Major share price drivers includes its contract sales trend, retail sales, rental performance as well as property policy from government
CRL is trading HKD30, there is no placement risk until it trades at HKD HKD39 (P/B =1x).  We recommend buying if stock trades &lt;HKD35 as a technical indicator


CR Land 1109 HK: Another SOE Play on China Prop – Dual Growth Engine from DP and IP Mall Business

<ul>
<li>We are turning bullish on the sector.  We think there are several structural drivers that will improve the sector as a whole, both on demand and supply side</li>
<li>Continued low onshore rates will boost the property market as well as reduce funding cost for developers.  The decline in new start will also help support home prices</li>
<li>Valuation is still almost historical low, we think the downside is relatively limited</li>
</ul>


We are turning bullish on the sector.  We think there are several structural drivers that will improve the sector as a whole, both on demand and supply side
Continued low onshore rates will boost the property market as well as reduce funding cost for developers.  The decline in new start will also help support home prices
Valuation is still almost historical low, we think the downside is relatively limited


China Prop Short Note: Turning Bullish on “lower Rates for Longer” & Improving Sector Fundamentals

<ul>
<li>Premier Li delivered the Government Work Report and announced key economic targets. We think there is no surprise to the market</li>
<li>Regarding property front, government re-iterated its intention and willingness to contain property developer debt default risks, as seen by China Vanke case</li>
<li>Valuation is undemanding.  But we continue to be bearish, and we monitor the leading indicators such as land sales and new starts</li>
</ul>


Premier Li delivered the Government Work Report and announced key economic targets. We think there is no surprise to the market
Regarding property front, government re-iterated its intention and willingness to contain property developer debt default risks, as seen by China Vanke case
Valuation is undemanding.  But we continue to be bearish, and we monitor the leading indicators such as land sales and new starts


Takeaway from Two Sessions and Latest Update Re China Property – Monitor Leading Indicators

Analyst

Steve

Midea Real Estate Holding  / Equity Bottom-Up

<ul>
<li>
<a href="https://www.smartkarma.com/entities/midea-real-estate-holding-ltd" target="_blank" data-smartkarma-citation="entities:27450:1" rel="noopener">Midea Real Estate Holding (3990 HK)</a> announced last night a proposal for distribution in specie of the property development business to shareholders.</li>
<li>The proposal allows shareholders to select between receiving pro rata shares in the PrivateCo, or the cash alternative at HKD5.90 per share, a 57% premium to last close at HKD3.75. </li>
<li>I believe this is a good deal for minority shareholders.  The company (ex. property development business) will continue to be listed on the HKSE after the distribution.  </li>
</ul>



Midea Real Estate Holding (3990 HK) announced last night a proposal for distribution in specie of the property development business to shareholders.
The proposal allows shareholders to select between receiving pro rata shares in the PrivateCo, or the cash alternative at HKD5.90 per share, a 57% premium to last close at HKD3.75. 
I believe this is a good deal for minority shareholders.  The company (ex. property development business) will continue to be listed on the HKSE after the distribution.  


Midea Real Estate (3990 HK):  Divesting Property Development Business (Cash Option At 57% Premium)

Hong Kong

China Resources Land Limited, through its subsidiaries, develops and invests in properties.  The Company also provides corporate financing and electrical engineering services.

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China Resources Land (1109 HK)

China Housing - A Mid-Year Check

In this note, we look at the latest May/June data, policy, and sentiment in China housing markets, with some reflections on where things are vs the...

Robert Ciemniak

CR Land 1109 HK: Another SOE Play on China Prop – Dual Growth Engine from DP and IP Mall Business

Besides COLI, we like 1109 HK CR Land, as another SOE play in the China Prop space. CRL has a dual growth engine from resi-for-sale biz and rental...

Jacob Cheng

China Prop Short Note: Turning Bullish on “lower Rates for Longer” & Improving Sector Fundamentals

We turn bullish on China property, on the back of several structural tailwinds: rates lower for longer to improve mortgage rate and funding cost,...

Jacob Cheng

Takeaway from Two Sessions and Latest Update Re China Property – Monitor Leading Indicators

We provided an update after China's Two Sessions and government policy on China property. There are increasing signs of government's support, but...

Jacob Cheng

Midea Real Estate (3990 HK): Divesting Property Development Business (Cash Option At 57% Premium)

Midea Real Estate (3990 HK) announced last night a proposal for distribution of the property development business to shareholders. The cash...

Steve

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