China Property "Ride on AI Supply Chain; Three Reasons to Upgrade" Lam

研报英文原文证据摘录

China Property "Ride on AI Supply Chain; Three Reasons to Upgrade" Lam

Global Research

13 May 2026ab

China Property Equities

China EmergingRide on AI Supply Chain; Three Reasons to

Upgrade Real Estate

John Lam, CFA

Analyst

john-za.lam@ubs.com

Demand: Rising industrial profits and positive PPI; Prefer tier 1 cities +852-2971 6358

We are turning more positive on the China property sector, due to 1) increased housing Vera Gong, CFA

demand visibility from rising industrial profits (AI supply chain) and positive PPI (our Analyst

strategy note: Green shoots emerging?); 2) positive wealth effect from companies with vera.gong@ubs.com

rising profitability/share prices, and mapping of their headquarters indicates a strong +852-2971 8950

concentration in Beijing and Shanghai; 3) falling vacancy rate in tier 1 cities suburb Mark Leung

districts, suggesting shadow inventory has been digested. In 2026, we expect property Analyst

prices in tier 1 cities to stabilize (previously -10%) and in tier 2 cities to still decline by 5% mark.leung@ubs.com

(previously -10%). In 2027, we expect prices in tier 1 cities to increase by 2% and in tier +852-2971 8636

2 cities to stabilize (previously -5%). We upgrade COLI (added to Key Call list), BEKE, Ben Ho

Jinmao and CMSK to Buy on their high exposure to tier 1 cities. We also like CR Land Associate Analyst

for its high tier 1 cities exposure and value unlock from asset securitization. ben.ho@ubs.com

+852-3712 2819

Demand: Mapping the headquarters of emerging sectors/companies

The surge of AI-related materials, government anti-involution measures and export

growth caused industrial profits to grow by 15% YoY in 1Q26 with positive PPI.

Historically, industrial profits have a 0.63 correlation to tier 1 cities property price.