[ET Net News Agency, 6 September 2019] HSBC Global Research said the interim results of
China's property sector lacked excitement while the outlook of most developers has notably
turned more cautious, stopping short of providing growth expectations beyond 2019 with the
exception of Shimao (00813).
The research house said it has become clearer that growth momentum, in terms of both
contracted sales and earnings, will slow, and thus, HSBC maintained its cautious outlook
on the housing market.
That said, HSBC believes current valuations have already largely discounted the
prevailing macro headwinds, ongoing trade tensions and FX volatility, and the more
uncertain operating backdrop.
Hence, it sees opportunities emerging for select stocks: HSBC's key picks remain COLI
(00688), CIFI (00884), GZ R&F (02777), KWG (01813) and Shimao (00813).
In the coming months, HSBC expects price cuts and slower land sales to potentially
revive the hope of policy relaxation and act as a catalyst for a sector re-rating. (KL)