Equity Research in HK and Mainland China

Li Tang

Macroeconomics

<ul>
<li>Chinese banks were reportedly asked to start adding counter-cyclical factors in their renminbi quotes for the PBOC to set the daily yuan fixing rate.</li>
<li>Previous media reported that PBOC might revive the counter-cyclical factor when RMB depreciation accelerated faster.</li>
<li>We think there is limited room for further drops in RMB rates but likely to remain under pressure at a 7.0+ per dollar level for the rest of the year.</li>
</ul>


Chinese banks were reportedly asked to start adding counter-cyclical factors in their renminbi quotes for the PBOC to set the daily yuan fixing rate.
Previous media reported that PBOC might revive the counter-cyclical factor when RMB depreciation accelerated faster.
We think there is limited room for further drops in RMB rates but likely to remain under pressure at a 7.0+ per dollar level for the rest of the year.


China Re-Introduce Counter-Cyclical Factor in Setting Rmb Reference Rates

Thematic (Sector/Industry)

<ul>
<li>The China Development Bank has issued the first special loan for guaranteeing property in Shenyang, capital of Liaoning province, and resumption of qualified stalled projects.</li>
<li>We believe, even if the policy side is eased, the stimulus to housing demand is still limited</li>
<li>We maintain preferences for high-quality, lower-leveraged developers, mostly state-owned developers.</li>
</ul>


The China Development Bank has issued the first special loan for guaranteeing property in Shenyang, capital of Liaoning province, and resumption of qualified stalled projects.
We believe, even if the policy side is eased, the stimulus to housing demand is still limited
We maintain preferences for high-quality, lower-leveraged developers, mostly state-owned developers.


First Special Loan for Guaranteeing Property Deliveries Issued to Shenyang City

<ul>
<li>The PBOC and CBIRC jointly published a circular to cut the lower limit of mortgage rates for first-home purchases by 20bps to LPR – 20bps</li>
<li>Policymakers signal that more policy support is coming in H2</li>
<li>Many local governments have issued property support measures. There is the possibility of further support directed from Beijing for consumption and property sales.</li>
</ul>


The PBOC and CBIRC jointly published a circular to cut the lower limit of mortgage rates for first-home purchases by 20bps to LPR – 20bps
Policymakers signal that more policy support is coming in H2
Many local governments have issued property support measures. There is the possibility of further support directed from Beijing for consumption and property sales.


PBOC Lowers Mortgage Rate Floor After Weak Loan Data

<ul>
<li>LPR remains unchanged at at 3.7% for 1-yr LPR and 4.6% for 5-yr LPR.</li>
<li>The PBOC and CBIRC issue statements on supporting the real economy in emergency symposium.</li>
<li>The newly formed State Council Logistics Leading Group , called to rectify excessive prevention and control measures that block logistics operations, and ensure a smooth transportation network.</li>
</ul>


LPR remains unchanged at at 3.7% for 1-yr LPR and 4.6% for 5-yr LPR.
The PBOC and CBIRC issue statements on supporting the real economy in emergency symposium.
The newly formed State Council Logistics Leading Group , called to rectify excessive prevention and control measures that block logistics operations, and ensure a smooth transportation network.


China Loan Prime Rate Unchanged as Regulators Turn the Attention to Supporting Supply Chains

<ul>
<li>The National Health Commission of the PRC(NHC) published the revised covid treatment guideline yesterday which we think is a key step toward the adjustment of its  "zero covid" policy.</li>
<li>We believe the revised guideline is a significant step toward further easing China's covid strategy.</li>
<li>However we think China will not change its dynamic zero-covid policy any time soon.</li>
</ul>


The National Health Commission of the PRC(NHC) published the revised covid treatment guideline yesterday which we think is a key step toward the adjustment of its  "zero covid" policy.
We believe the revised guideline is a significant step toward further easing China's covid strategy.
However we think China will not change its dynamic zero-covid policy any time soon.


Highly experienced sell-side analyst with more than ten years of experience in the field of China’s in-depth policy-driven macro research in China (Beijing) .
Covering in equity research in HK and Mainland market mainly real estate, construction,steel sector.
The Ideas generation based on an analysis of China’s future direction and policy decisions fundamental analysis on sector impact, market drivers, timing and scale, combined with quantitative analysis.