China Property "Investor feedback on our sector upgrade" Lam

Research evidence excerpt

China Property "Investor feedback on our sector upgrade" Lam

Global Research

9 June 2026ab

China Property Equities

China EmergingInvestor feedback on our sector upgrade

Real Estate

John Lam, CFA

Recovery driven by AI supply chain, but how sustainable? Analyst

We did three weeks of marketing in Hong Kong and mainland China, following our john-za.lam@ubs.com

sector upgrade note (Ride on AI Supply Chain; Three Reasons to Upgrade). Overall, +852-2971 6358

investors broadly agree with our view on improving sentiment helped by 1) increased Vera Gong, CFA

industrial profits from AI-supply chain and positive wealth effect from AI/Tech sector that Analyst

benefits high end property, 2) lower interest rates due to higher Housing Provident Fund vera.gong@ubs.com

borrowing cap which benefits smaller unit secondary transactions. Major concerns +852-2971 8950

include 1) sustainability of property sales recovery, given the weak macro data, 2) how Mark Leung

much share price upside. Looking ahead, key datapoints to watch are 1) transaction mix, Analyst

secondary transaction and listing data; 2) land auction data (which has been picking up); mark.leung@ubs.com

3) rental price; and 4) industrial enterprise profits and export data. We remain positive on +852-2971 8636

the sector and remain Buy on COLI (Key Call), BEKE, CRL, CMSK and Jinmao. Ben Ho

Associate Analyst

Four signals showing improved demand supply dynamics ben.ho@ubs.com

+852-3712 2819

A key question from investors is whether the secondary transactions of small units

(<Rmb2mn per unit) translate into upgrade demand. We think so based on the data. 1)

In Shanghai, secondary transaction for properties with Rmb4-10mn per unit increased to

4.3k units in May 2026, the highest level in the past 12 months. Transaction mix for