External broker reports(aggregated public sources), CMB International

CMB International

External broker reports(aggregated public sources)

Incorporated in Hong Kong, supported by the mainland and targeting in global market, CMB International Capital Corporation Limited (“CMBI”) is an integrated financial institution providing comprehensive and professional services. As a wholly-owned subsidiary of China Merchants Bank ("CMB"), by leveraging on the Group’s synergy and coordination in domestic and overseas markets, as well as CMB’s strong resources and outstanding social reputation, CMBI and its subsidiaries have been actively implementing diversified business strategies and set up an overall layout of main business segments including Corporate Finance, Asset Management, Wealth Management, Global Markets and Structured Finance, etc. Adhering to the philosophy of “being clients oriented and increasing our own values by the way of creating value for clients”, CMBI endeavors to provide quality and integrated financial services to institutional, corporate and individual customers both domestic and overseas including Hong Kong IPO sponsorship and underwriting, share placement and rights issue for listed companies, financial advisors, bonds issuance services, asset management, direct investment, wealth management, equity sales and trading, etc.

Thematic (Sector/Industry)

<ul><li>Both primary and secondary market reacted strongly to the new policy (认房不 认贷) during the weekend.</li><li>Project visitors and transactions for new home in BJ &amp; SH showed a rally, and 2 nd -hand house listing volume was boosted by cashout demand and sell-to-buy demand.</li><li>We think it is hard for newly-released demand to hold on and it might be able to support the new home recovery for 1-3 months in our view as part of the demand is relying on the transaction of existing market and is likely to be curbed by 2nd -hand housing price which will keep under pressure in our view due to the reason we illustrated below. </li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Both primary and secondary market reacted strongly to the new policy (认房不 认贷) during the weekend.Project visitors and transactions for new home in BJ &amp; SH showed a rally, and 2 nd -hand house listing volume was boosted by cashout demand and sell-to-buy demand.We think it is hard for newly-released demand to hold on and it might be able to support the new home recovery for 1-3 months in our view as part of the demand is relying on the transaction of existing market and is likely to be curbed by 2nd -hand housing price which will keep under pressure in our view due to the reason we illustrated below. Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

China Property Sector – Will the newly-released demand hold on?

HK/China Equity Long-Short

Osbert Tang, CFA

<ul>
<li>Although 5% GDP growth target for 2023 is at the low end of market speculation of 5.5-6%, we think this reflects the government's conservative stance amid post-COVID recovery. </li>
<li>A 0.2pp higher budget deficit and a special purpose bond quota of Rmb3.8trn suggested that government spending will stay as important economic driver.</li>
<li>Consumption is another major stimulus for economic growth, and more supportive measures will be rolled out - we have seen many cities planning to hand out consumption vouchers.</li>
</ul>


Although 5% GDP growth target for 2023 is at the low end of market speculation of 5.5-6%, we think this reflects the government's conservative stance amid post-COVID recovery. 
A 0.2pp higher budget deficit and a special purpose bond quota of Rmb3.8trn suggested that government spending will stay as important economic driver.
Consumption is another major stimulus for economic growth, and more supportive measures will be rolled out - we have seen many cities planning to hand out consumption vouchers.


China NPC: Implications of Government Working Report 2023

<ul><li>We are positive towards PM sector in 2023 as it is the key beneficiary of both housing completion push (GFA gain) and reopening (Community VAS), so higher growth and better cash collection.</li><li>This would create room for the existing market leaders and surviving POEs (after property crisis) to accelerate earnings growth, both organically and via M&amp;A activities.</li><li>Therefore, we forecast 2023E earnings growth at 23% from a low base of 12% in 2022E.</li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

We are positive towards PM sector in 2023 as it is the key beneficiary of both housing completion push (GFA gain) and reopening (Community VAS), so higher growth and better cash collection.This would create room for the existing market leaders and surviving POEs (after property crisis) to accelerate earnings growth, both organically and via M&amp;A activities.Therefore, we forecast 2023E earnings growth at 23% from a low base of 12% in 2022E.Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

China Property Service Sector – 2023 a year for market leaders and survivors

Equity Research in HK and Mainland China

Li Tang

<ul>
<li>Quality developers are said to be supported by NAFMII to issue M&amp;A bonds with a long maturity to acquire real estate projects from troubled developers</li>
<li>This adds further fuel to the rumour that financing for M&amp;A activity will be outside of the three red lines</li>
<li>The Politburo December meeting provided a positive signal for property policy that is expected to be echoed in the Central Economic Work Conference statement this week</li>
</ul>


Quality developers are said to be supported by NAFMII to issue M&amp;A bonds with a long maturity to acquire real estate projects from troubled developers
This adds further fuel to the rumour that financing for M&amp;A activity will be outside of the three red lines
The Politburo December meeting provided a positive signal for property policy that is expected to be echoed in the Central Economic Work Conference statement this week


China State-Owned Developer Plans to Issue M&A Bonds on Interbank Market

<ul>
<li>The National Association of Financial Market Institutional Investors (NAFMII), held a discussion meeting joined by representatives from real estate developers.</li>
<li>The meeting could signal that regulators might ease domestic bond issuance for developers.</li>
<li>We believe that the market has been over-pessimistic on the real estate sector.</li>
</ul>


The National Association of Financial Market Institutional Investors (NAFMII), held a discussion meeting joined by representatives from real estate developers.
The meeting could signal that regulators might ease domestic bond issuance for developers.
We believe that the market has been over-pessimistic on the real estate sector.


Developers Said To Plan Raising Funds Through Interbank Debt Issuance

China

Poly Property Services is a China-based company primarily engaged in providing property management services, community value-added services, and value-added services to non-property owners. Its property management services encompass security, cleaning, greening, gardening, and maintenance for property owners, residents, and developers. The company was established on June 26, 1996, and is headquartered in Guangzhou, China.

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Poly Property Services (6049 HK)

China Property Sector – Will the newly-released demand hold on?

Project visitors and transactions for new home in BJ & SH showed a rally, and 2 nd -hand house listing volume was boosted by cashout demand and...

CMB International

China NPC: Implications of Government Working Report 2023

A 0.2pp higher budget deficit and a Rmb3.8trn special purpose bond quota suggested government spending will remain important economic driver. More...

Osbert Tang, CFA

China Property Service Sector – 2023 a year for market leaders and survivors

We are positive towards PM sector in 2023 as it is the key beneficiary of both housing completion push (GFA gain) and reopening (Community VAS), so...

CMB International

China State-Owned Developer Plans to Issue M&A Bonds on Interbank Market

The new move adds further fuel to the rumour that financing for M&A activity will be outside of the three red lines,This is a crucial development...

Li Tang

Developers Said To Plan Raising Funds Through Interbank Debt Issuance

We believe that the market has been over-pessimistic on the real estate sector. The meeting could signal that regulators might ease domestic bond...

Li Tang

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