Summary of China Property Market Conference Call Industry Overview - **Industry**: China Property Market - **Key Data**: - Real Estate Investment (REI) recorded a significant decline of **-35.8% year-on-year** in December, marking the largest drop since December 2009 [1] - New home prices decreased by **-3.0% year-on-year** in December, while secondary home prices fell by **-6.1% year-on-year** [1] - The overall residential sales volume dropped by **-26% year-on-year** in December [1] Core Insights - **Investment Trends**: - REI for FY25 is projected at **Rmb8.3 trillion**, a **-17.2% year-on-year** decline, falling below residential sales of **Rmb8.4 trillion** [2] - New housing starts are at a **21-year low**, with **588 million sqm** started, down **-20% year-on-year** [2] - The area under construction decreased by **-10%**, reaching **6.6 billion sqm** [2] - **Market Conditions**: - The market is expected to face a structural decline into 2026 unless liquidity improves, with anticipated REI dropping by **-13% year-on-year** [3] - National sales are projected to decline by **-11% year-on-year**, with new home average selling prices expected to fall by **-3% year-on-year** [3] - **Policy Impacts**: - Recent government policies aim to stabilize the market, including a reduction in the down payment for commercial properties from **50% to 30%** and extending tax refunds for home sellers [4] - The easing measures are seen as risk control rather than a direct boost to the market [4] Additional Important Points - **Sales and Earnings Outlook**: - Weak sales and earnings downgrades are anticipated, with a potential short-lived rebound in share prices driven by policy expectations [5] - The luxury retail sector showed positive same-store sales growth in Q4, but December results were below expectations [5] - **Land Sales**: - Land sales in 300 cities decreased by **-9% in area** and **-23% in value**, reaching an 18-year low [2] - The government land revenue for the first 11 months of 2025 was down **-11%** [1] - **Macro Economic Indicators**: - China's GDP growth for FY25 is projected at **+5.0% year-on-year**, with a slight deceleration in retail sales growth to **+0.9% year-on-year** in December [1] This summary encapsulates the critical insights and data points from the conference call regarding the current state and future outlook of the China property market.

Vi e w p o i n t | 05 Jan 2026 10:38:45 ET │ 13 pages China Property Qiushi Journal Commentary on the Sector: Positive but Not Overread CITI'S TAKE Commentary from Qiushi Journal (official media under the CPC Central Committee) (2-Jan-2026) mentioned: [1] property exhibits notable characteristics of financial assets with wide-ranging interconnections, thus enhancing expectation mgmt is critical; [2] property is a pillar industry ('24: 13% of GDP incl. construction; 70m employment) & major source of resident ...

Summary of China Property Market Conference Call Industry Overview - The conference call focused on the **China Property** market, highlighting significant declines in various metrics related to real estate investment and sales. Key Points Real Estate Investment (REI) Trends - **November REI** experienced a record drop of **30.3% YoY**, marking the sharpest decline on record, with a total of **RMB 0.5 trillion**, the lowest monthly figure since April 2012 [1][11] - **Completion rates** fell by **26% YoY** in November, slightly improved from **28%** in October [1] - **Starts** decreased by **28% YoY**, consistent with a **29%** decline in October [1] - **Residential sales** dropped by **28% YoY**, the largest single-month decline since May 2024 [1] - The **70-cities price index** for new homes decreased by **2.8% YoY** in November, while secondary homes saw a **5.7% YoY** decline [1] Market Dynamics - **Secondary market sales** in 18 key cities fell by **22% YoY** in November, with average weekly volume showing a **13% MoM** increase, driven by price cuts [2] - Listings in 39 cities remained stable, but cities like Shenzhen and Xi'an saw increased listings, putting pressure on prices [2] - A survey indicated only **9%** of depositors expect housing prices to rise in 2026, a historical low [2] Future Projections - The outlook for 2026 suggests a **structural decline** in the market unless liquidity improves, with expectations of: - **REI** down **13% YoY** - National sales down **11% YoY**, with residential sales projected at **RMB 6.8 trillion** [3] - New home average selling prices (ASP) expected to fall by **3% YoY** [3] - Starts anticipated to drop to levels last seen in 2003, with a **15% YoY** decline [3] Policy and Regulatory Environment - The **Central Economic Work Conference (CEWC)** indicated a more proactive policy tone, with potential demand-side easing measures expected in Q4 2025 [4] - Urban renewals and REIT approvals are likely to accelerate, but significant changes in home price expectations are not anticipated due to ample supply [4] - Monitoring for targeted monetary easing or pro-leverage initiatives is advised, though the likelihood remains low [4] Market Sentiment and Investment Recommendations - The sector's share prices corrected in early December amid debates over weak sales and expectations of policy-driven rebounds, particularly following Vanke's debt extension [5] - Anticipated earnings downgrades in December and January for well-known names in the sector [5] - Luxury mall retail sales are expected to maintain a positive trend in Q4 after outperforming in Q3 [5] - Recommended stocks include **Jinmao, C&D, and CRL** as top picks [5] Additional Insights - The **macro environment** shows mixed signals, with November exports beating expectations at **5.9% YoY**, while retail sales decelerated to **1.3% YoY** despite a higher CPI of **0.7%** [1] - Fixed Asset Investment (FAI) remains weak, down **12%** YoY, with a cumulative decline of **2.6%** for the first eleven months [1] This summary encapsulates the critical insights from the conference call regarding the current state and future outlook of the China property market, emphasizing the significant challenges and potential policy responses.

Summary of China Property Market Conference Call Industry Overview - The conference call focused on the **China Property** market, highlighting significant declines in investment, completion rates, and home prices as reported by the National Bureau of Statistics (NBS) for October 2025. Key Points and Arguments Investment and Sales Trends - **Real Estate Investment (REI)** dropped by **22.5% year-over-year** in October, worsening from a **21.6% decline** in September, marking the sharpest decline since November 2022 [1] - **Completion rates** fell by **28% year-over-year**, a significant drop from a **1.5% increase** in September [1] - **New construction starts** decreased by **29% year-over-year**, compared to a **14% decline** in September [1] - **Residential sales** saw a **25% decline**, with the gross floor area (GFA) sold down **20%**, both representing the largest retreats since May 2024 [1] - The **70-cities price index** showed a widening decline, with new home prices down **0.5% month-over-month** and secondary home prices down **0.7% month-over-month** [1] Macro Economic Context - October exports experienced a **1.1% decline**, the first drop in eight months, while fixed asset investment (FAI) missed expectations with a **12% decline** [1] - Credit data remained soft, with new loans and total social financing (TSF) at **RMB 0.2 trillion** and **RMB 0.8 trillion**, respectively, below consensus estimates [1] - Retail sales showed stability with a **2.9% increase**, while the Consumer Price Index (CPI) and Producer Price Index (PPI) exceeded expectations [1] Local Government Initiatives - Local governments are promoting high-quality property development under the **15th Five-Year Plan**, with new rules linking completed home sales to new land sales [2] - For instance, Pingjiang County in Hunan requires completed home sales for new land acquisitions, with completed homes accounting for **62%** of local sales [2] - Fujian's Fuzhou is linking pre-sales approvals to property firms' credit profiles, and Guangzhou mandates **100% pre-fabrication** for new residential lands starting in 2026 [2] Market Dynamics - Secondary sales in **18 key cities** dropped by **29% year-over-year** in October, with average weekly volumes at **21,000 units**, the second-lowest year-to-date [3] - Listings in **39 cities** remained flat month-over-month, but Tier-1 cities saw a **1.5% increase** [3] - The flexibility in secondary price cuts may lead to continued price weakness and shift demand from new homes to the secondary market [3] Sector Outlook - The property sector is expected to experience range-bound trading, with limited new property policies anticipated apart from execution urgencies [4] - Property sales are likely to remain soft in **Q4 2025** due to high bases and limited support from easing measures in low-tier cities [4] - However, top-10 cities are showing mild growth, with **82%** of listed companies' land acquisitions occurring in these areas, and luxury home sales are outperforming with improved margins [4] - Preferred investment targets include companies with luxury and quality products, such as Jinmao, C&D, CRL, and COLI, which has shown strong sales in Tier-1 cities [4] Additional Insights - The **National Residential Inventory** reached **396 million sqm** by October 2025, indicating a significant amount of unsold inventory [24] - The **transaction amount** for overall real estate in October was **RMB 598 billion**, reflecting a **25.5% decline** year-over-year [9] - The **average weekly primary transaction volume** in October was down **35.4% year-over-year**, indicating a significant slowdown in market activity [27] Conclusion The China property market is facing substantial challenges with declining investment, sales, and prices. Local government initiatives aim to stimulate high-quality development, but the overall outlook remains cautious, particularly for the remainder of 2025. Investors are advised to focus on companies with strong fundamentals and luxury offerings amidst the ongoing market volatility.

Summary of China Property Conference Call Industry Overview - **Industry**: China Property - **Event**: CPC Forth Plenary Session (20-23 Oct) Key Points and Arguments 1. **Development Model and Economic Focus**: The Plenary emphasized promoting high-quality development and advancing people-centric urbanization, indicating a shift in focus from real estate to manufacturing and technology sectors. The property sector is expected to account for an estimated 13% of GDP by 2025, down from a peak of 32% [1][1][1] 2. **Economic Stabilization**: The limited mention of property and absence of new stimulus measures suggest a focus on stabilization rather than stimulus. The decline in real estate investment (REI) was offset by growth in other sectors, contributing to a resilient GDP growth of 4.8% in Q3 2025 [1][1][1] 3. **Impact on Household Confidence**: With property assets constituting 66% of household assets, the decline in home prices is negatively affecting household confidence and consumption, particularly among the working class. Measures to support home prices in core cities are anticipated by 2026 [1][1][1] 4. **New Development Model**: The new development model aims to transform the property industry by focusing on quality improvement rather than scale expansion. This shift is expected to benefit luxury-home builders and landlords of recurring profit [1][1][1] 5. **Three-Pronged Housing System**: The proposed housing system includes commodity housing for high-end buyers, rental housing for urban migrants, and social housing for low-income classes. It is expected that rental and social housing could account for approximately 45% of supply in the future [2][2][2] 6. **Optimization of Production Factors**: A linkage mechanism to optimize the allocation of production factors (people, housing, land, and capital) is proposed to coordinate land supply, property supply, and government budget in relation to population flow [2][2][2] 7. **Property Development Improvements**: Recommendations include improving property development, financing, sales systems, and supervision, as well as deepening urban renewal in key cities [2][2][2] 8. **Promotion of Good-Quality Homes**: The focus will be on renovating aged buildings, energy-saving measures, and adopting advanced construction technologies [2][2][2] Additional Important Content - **Analyst Ratings and Valuations**: The report includes various company valuations and ratings, indicating a significant NAV discount for many property companies as of October 23, 2025. The average NAV discount for H-share companies is noted to be -65% [5][8][8] - **Investment Recommendations**: The report provides investment ratings for various companies, with a mix of "Buy," "Neutral," and "Sell" ratings based on expected total returns and risk assessments [22][24][24] This summary encapsulates the critical insights from the conference call regarding the China property sector, highlighting the shift in focus towards stabilization and quality improvement in the industry.