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<Research>Daiwa: CN Developers' May Sales Further Improve with Recovery in T1 Cities; Top Picks CHINA RES LAND, CHINA OVERSEAS
Recommend 12 Positive 6 Negative 8 |
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CRIC released forecast data on contracted sales for the top 100 Chinese property developers for May 2026 and 5M26, Daiwa cited in a research report. Data showed that contracted sales of Chinese property developers in May maintained a steady momentum, whereas contracted sales area and contracted sales value of the top 100 developers shrank 10% YoY and 2% YoY, respectively, with the declines narrowing further from 15% and 12% in April. On an MoM basis, contracted sales area and contracted sales value in May elevated 9% and 15%, respectively, compared with gains of 3% and 3% in the same period last year, reflecting that the improvement was not only driven by seasonality but also indicated a genuine recovery in underlying demand. Daiwa pointed out that the divergence between leading and lagging developers widened further in May. In light of strong sales in T1 cities, leading SOE developers generally recorded double-digit YoY growth in contracted sales in May. These include CHINA RES LAND (01109.HK), with 28% YoY growth, CHINA OVERSEAS (00688.HK), with 14% YoY growth, and MERCHANTS SHEKOU (001979.SZ), with 20% YoY growth. According to data from CREIS, sales of these SOEs in T1 cities grew 9-134% YoY, with Shenzhen posting an even stronger YoY spikes of 180-1,523%. The broker believed the relaxation of home purchase restrictions in Shenzhen at end-April was a key catalyst. Standing in contrast, POEs continued to underperform. Even BINJIANG GP (002244.SZ) and GREENTOWN CHINA (03900.HK), which are concentrated in Hangzhou, recorded sales downfall. Other surviving POEs such as LONGFOR GROUP (000960.HK) and SEAZEN (01030.HK) saw May sales plunge 48%, owing to limited new project launches and insufficient presence in T1 markets. The broker reiterated its preference for leading SOEs with solid exposure in T1 cities and remained cautious on POEs facing rating downgrade risks as sales momentum fades. Its sector top picks remain CHINA RES LAND and CHINA OVERSEAS, both being maintained at Buy ratings. Auto-translated by AI This article was automatically translated by AI, the original language version should be considered the authoritative version. AASTOCKS.com Limited does not guarantee its accuracy or completeness and accepts no liability for any damages or losses arising from the use of this translation. More Details
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