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<Research>M Stanley Sees Shanghai Housing Buyback Plan Limited Boost to CN Property Sales
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Shanghai recently implemented a pilot policy for the acquisition of second-hand homes, and China Construction Bank's Shanghai branch stated that it will provide full-cycle financial support for the pilot acquisition of second-hand homes for affordable rental housing projects in Shanghai. Morgan Stanley has released a research report, viewing this plan as a symbolic gesture that may have only limited support for China's housing sales. The broker based its argument on grounds that the plan doesn't reduce the overall housing supply and may even increase it in the long run. It also fails to address the funding source and scale bottleneck issues of the buyback plan. Besides, homeowners must purchase new homes to become eligible for the plan. Considering that the value of new homes in core urban areas is much higher than old homes, it may require homeowners to lift leverage, making the policy implementation more challenging. Given that the recent outperformance of the Chinese property sector driven by investment sentiment may not be sustainable, Morgan Stanley believes the recent rebound in the second-hand market sales over the past few weeks was only temporary. It continues to favor quality developers with reliable self-rescue capabilities, including CHINA RES LAND (01109.HK) and SEAZEN HOLDINGS (601155.SH). It also favors C&D INTL GROUP (01908.HK), expecting its quality land reserves to drive a recovery in earnings growth. AAStocks Financial News |
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