Quzhou City, Zhejiang Province, has introduced a robust home purchase subsidy policy. Recently, departments including the Quzhou City Housing and Urban-Rural Development Bureau jointly issued a notice, introducing multiple measures to stabilize the real estate market, such as offering group purchase subsidies for home purchases, implementing improved home purchase subsidies for families with multiple children, deepening the integrated use of housing vouchers across the city, accelerating the improvement of the housing security system, and launching a campaign to distribute consumption vouchers for home purchases in the Smart New City. "Quzhou's new real estate policies released in mid-year mainly focus on home purchase subsidies, aiming to support housing consumption," Lu Qilin, Research Director of the 58 Anjuke Research Institute, told reporters. According to the notice, individuals who subscribe to newly-built commercial residential properties in the urban area of Quzhou City (projects that have obtained their first pre-sale permits since 2021) during the 2025 real estate consumption promotion campaign will be reported by participating real estate enterprises to the corresponding housing transaction departments. The housing transaction departments in the urban area will group every 10 successful purchases (groups) and provide a group purchase subsidy of 20,000 yuan per unit to homebuyers. The group purchase subsidy is limited to 300 units and will be available for two months, or until the quota is exhausted. In terms of implementing improved home purchase subsidies for families with multiple children, starting from June 20, 2025, families with multiple children purchasing newly-built commercial residential properties in the urban area of Quzhou City (projects that have obtained their first pre-sale permits since 2021) will be eligible for improved home purchase subsidies. Specifically, families with two children who sign a "Zhejiang Province Commercial Housing Sales Contract" for a residential property with a floor area of 100 m² or more can apply for an 80,000-yuan subsidy. Families with three children who sign a "Zhejiang Province Commercial Housing Sales Contract" for a residential property with a floor area of 120 m² or more can apply for a 200,000-yuan subsidy. Subsidies will be issued in the form of housing vouchers, which can be used in conjunction with other types of housing vouchers. This policy will be implemented on a trial basis for one year. In addition, the Smart New City Management Committee, in collaboration with some real estate enterprises within its jurisdiction, has jointly launched home purchase consumption vouchers. Individuals purchasing newly-built commercial residential properties in projects participating in the consumption promotion campaign will receive a home purchase consumption voucher subsidy of 600 yuan/m² based on the floor area of the residential property with ownership rights specified in the "Zhejiang Province Commercial Housing Sales Contract" (the subsidy will be calculated based on the floor area corresponding to the additional amount paid after deducting the value of various housing vouchers from the total housing price; for trade-in scenarios, the excess amount can be subsidized after complying with the policy requirements of the implementing entity), with a maximum subsidy of 100,000 yuan per unit. This subsidy campaign will be conducted simultaneously with the 2025 city-county coordinated real estate consumption promotion campaign, and there will be no total limit on the distribution of consumption vouchers. Lu Qilin pointed out that Quzhou's current policies differ from those previously announced in other cities and possess certain innovative and referential values. Firstly, in the latest policies, the three subsidies—group purchase subsidies, home purchase subsidies for families with multiple children, and home purchase consumption subsidies—are implemented concurrently, breaking away from the traditional "single subsidy-focused" model adopted in various regions. Second, multi-child subsidies are implemented in a tiered manner, with different amounts for second and third children, and the subsidy for third children is more generous. Third, real estate developers directly subsidize homebuyers in the form of consumption vouchers, and the subsidy amounts are not low. This differs from the common model of "relying on intermediary channels with high commissions," allowing homebuyers to directly benefit while also reducing the marketing costs of real estate developers. He further stated that Quzhou's strong support for housing consumption through subsidies may be related to changes in the local market. According to data from 58 Anjuke Research Institute, the recent interest in searching for new homes in Quzhou has pulled back YoY. "It can be seen that the local government hopes to promote the 'stabilization and recovery' of the property market through subsidies." In fact, amid the backdrop of a pullback in market enthusiasm, many regions have recently introduced home purchase subsidy measures. On June 11, Yuhang District of Hangzhou City issued new property market policies, including pilot promotion of "high-quality housing" construction, optimization of housing provident fund services, and implementation of home purchase support policies. According to the latest policies, Yuhang District encourages real estate developers to carry out various activities such as home purchase sales promotions, offering certain discounts to homebuyers. From June 10, 2025, to June 30, 2025, for projects that carry out home purchase sales promotions, a subsidy of 40,000 yuan per unit will be provided to homebuying families that purchase newly built commercial residential properties in the corresponding projects after the real estate ownership certificates for the purchased properties are obtained. The total subsidy amount is 16 million yuan, and it will be distributed on a "first-come, first-served" basis according to the online contract signing time until the funds are exhausted. Yuhang District has also extended the implementation period of special home purchase subsidies. On the basis of implementing the municipal-level high-level talent (categories A-D) home purchase subsidies, high-level talents who meet the criteria (municipal-level category E, district-level category E, and above) purchasing newly built commercial residential properties in Yuhang District will be eligible for a maximum home purchase subsidy of 200,000 yuan. The policy implementation period has been extended to December 31, 2025. In addition, Chongqing issued six policies related to housing consumption on May 30, mentioning that for newly purchased commercial residential properties (with completed online contract registration and deed tax payment) in the central urban area with a single-unit floor area of over 140 m², the district government (administrative committee) where the property is located will provide a subsidy of 0.5% of the total property price. The Hefei Housing Security and Real Estate Administration Bureau issued a notice on May 29, stating that the relevant policies on home purchase subsidies in Hefei will be extended until May 14, 2026. Industry insiders pointed out that, based on the transaction situation in May this year, there are signs of a pullback in the market, and downward pressure on housing prices has emerged during the adjustment process. Various regions need policy support to further stabilize the market. "Since Q2, some new phenomena have emerged in the market, and the pressure for the property market to stabilize and recover has increased. For example, the listing volume of second-hand homes has risen rapidly, while the decline in second-hand home prices has accelerated. Meanwhile, during the implementation of "high-quality housing" projects, some newly developed projects have had a certain impact on old planned projects and second-hand homes, making it difficult for some projects to sell. " said Li Yujia, Chief Researcher at the Guangdong Housing Policy Research Center. According to monitoring data from E-house China Research Institute, in May this year, the sales area and sales volume of commercial housing nationwide were 71 million m² and 0.71 trillion yuan, respectively. Although they increased by 10.3% and 13.1% MoM from April, they decreased by 3.3% and 6% YoY, respectively. "Looking at a longer timeframe, the monthly sales area was the lowest for the same period since 2011, and the monthly sales volume reached the lowest for the same period since 2016," said an analyst from E-house China Research Institute. Chen Wenjing, Director of Policy Research at the China Index Academy, pointed out that the State Council executive meeting on June 13 set the tone to "drive the real estate market to stabilize and recover with greater force," sending a positive signal of further policy intensification that will have a positive impact on the market. "The top leadership has clarified four key areas for policy efforts going forward: stabilizing expectations, activating demand, optimizing supply, and mitigating risks. The implementation and follow-up of these policies are expected to be crucial in promoting the market to 'stabilize and recover,'" Chen Wenjing added.

Debt restructuring for real estate enterprises is expected to enter the "debt reduction era." Recently, Sunac China announced that holders of approximately 74% of the total outstanding principal amount of its existing debts had submitted letters to join the offshore debt restructuring support agreement. Country Garden also announced that it had reached a consensus with over 70% of its creditors on high-yield bonds in terms of offshore debt, aiming to complete the overall restructuring of offshore debt within this year. With Sunac and Country Garden successively announcing the progress of their offshore debt restructuring, the debt restructuring or reorganization of troubled real estate enterprises is accelerating. Since June, offshore debt restructuring plans of real estate enterprises such as CIFI and Golden Wheel Tiandi have basically been approved by creditors and will proceed to court hearings. Logan Group has released a debt restructuring plan, aiming to advance debt optimization efforts. At the same time, the debt restructuring model for real estate enterprises is shifting from extension to substantive debt reduction. Among them, Sunac's offshore debt restructuring plan is expected to reduce debt by approximately RMB 60 billion. Country Garden's offshore debt restructuring proposal is expected to reduce debt by up to $11.6 billion. CIFI's offshore debt restructuring is expected to reduce offshore debt by approximately $5.27 billion, equivalent to approximately RMB 37.9 billion. "If enterprises and investors can reach a consensus on the terms of debt restructuring involving 'debt reduction,' we believe that the short-term liquidity pressure on real estate enterprises will be alleviated, allowing them to devote more energy to asset revitalization and sales, which will have a positive impact on the stabilization of the entire industry," Shi Lulu, Director of Corporate Ratings, Asia Pacific at Fitch Ratings, told reporters. However, while reaching a restructuring agreement can alleviate external financing pressure, real estate enterprises still face challenges in internal operating cash flow. Shi Lulu believes that in the short term, the quality of existing projects and the ability to revitalize assets are important considerations for determining a real estate enterprise's endogenous cash flow and investor decisions. "Despite the continuous optimization and adjustment of policies by the central and local governments, the recovery of the real estate market may primarily be concentrated in first-tier cities and some strong second-tier cities. However, competition in these cities is intensifying, as most national state-owned real estate enterprises are also repositioning and focusing on developing in these cities," Shi Lulu said. "Whether restructuring real estate enterprises can replenish land in these cities will have a significant impact on their medium and long-term development." Acceleration of Debt Restructuring for Real Estate Enterprises Recently, leading real estate enterprises such as Sunac and Country Garden have successively announced the progress of their restructuring, with debt reductions often amounting to billions of dollars, signaling that the industry's debt resolution process has entered a critical stage. "Currently, Sunac has secured support from approximately 74% of all creditors, indicating that the offshore debt restructuring is substantially completed," a debt restructuring analyst said. When the court rules on a debt restructuring case, it is deemed approved if 75% of the creditors who participate in the vote cast affirmative votes. A source close to Sunac told reporters that once the offshore debt restructuring is successful, Sunac will become the first large-scale real estate enterprise in the industry to have its offshore debt basically cleared to "zero," significantly mitigating debt risks at the publicly listed firm level, with an estimated debt resolution of approximately 60 billion yuan. Sunac's offshore debt restructuring receiving a high level of support is not an isolated case. On June 5, Wu Bijun, Chief Financial Officer and Executive Director of Country Garden, stated at an online shareholders' meeting that consensus had been reached with over 70% of creditors on high-yield debt. In addition, CIFI Holdings has also made progress in its offshore debt restructuring. The company announced that it had secured the required statutory majority support from plan creditors at a plan meeting held on June 3, and it is expected that offshore debt will be reduced by approximately $5.27 billion after the restructuring. The next step is to seek court approval for the plan on June 26. On the same day, Logan Group announced the optimization and adjustment of its debt restructuring plan. Under the new restructuring plan, the 29 original credit enhancement assets of the underlying bonds will be used for the full conversion of the specific asset option, the asset-for-debt settlement mode (including in-kind debt settlement and trust debt settlement) under the asset-for-debt option, and the full debt retention option, maximizing the revitalization of credit enhancement assets. Meanwhile, the company's shareholders will raise additional cash and equity resources for the new restructuring plan. Liu Shui, Director of Corporate Research at the China Index Academy, told reporters that the acceleration of debt restructuring among real estate enterprises is attributed to two factors. First, distressed real estate enterprises are offering diversified restructuring methods, such as combining debt-to-equity swaps, debt maturity extensions, asset settlements, and cash payments, which can meet the needs of different creditors and improve the acceptability of the plans. Second, creditors' attitudes have shifted under the current market conditions. "The real estate market has been adjusting for a long time, and creditors are aware of the difficulty real estate enterprises face in repaying debts. Compared to bankruptcy liquidation and the continuous depreciation of assets, they are more inclined to accept restructuring plans to improve the debt repayment rate. Additionally, some creditors, after the continuous transfer of debts of distressed real estate enterprises, have lower holding costs. If the cash recovery value of the restructuring plan is more attractive, they are more willing to accept it." Debt-to-Equity Swaps and Debt Reduction Become Mainstream It is worth noting that this year, the debt restructuring of real estate enterprises has moved from maturity extensions and deferred payments into the deep waters of debt reduction and burden alleviation. According to the offshore debt restructuring plans of Sunac, Country Garden, and CIFI Holdings, a significant reduction in debt principal has become a core feature. This shift may be driven by severe debt pressures. Data from CRIC shows that the scale of debt maturities for real estate enterprises in 2025 will reach 525.7 billion yuan, further climbing from 482.8 billion yuan in 2024. "The scale of debt maturities for real estate enterprises this year is higher than that in 2024, posing greater debt repayment pressures. As multiple real estate enterprises advance their debt restructuring, the trend of increasing debt reduction ratios is gradually emerging," pointed out a research report by Orient Securities. "This year, the debt reduction ratios in the debt restructuring of many real estate enterprises are significantly higher than the levels in 2023," Zhang Bo, President of the 58 Anjuke Research Institute, told reporters. In the first five months of this year, the total sales of the top 100 real estate enterprises declined on a YoY basis, while the sales decline of distressed real estate enterprises was even more pronounced, directly leading to changes in the original cash flow forecasting models for these enterprises. "Under the new model, the future cash inflows of distressed real estate enterprises are expected to continue to decrease. This cash flow gap renders extension strategies ineffective. Only by reducing debt through debt reduction can the interests of creditors be maximized," Zhang Bo said. Liu Shui further explained that considering the decline in the absolute scale of the new home market over the long term and the fact that the market is still bottoming out in the short term, with asset depreciation pressures remaining, simply extending the repayment period may lead to issues of repeated overdue payments and secondary extensions, and cannot thoroughly resolve the debt crisis. "Therefore, debt-to-equity swaps and principal reductions can achieve a reduction in the company's debt scale, delay the overall debt repayment pressure, and debt-to-equity swaps also simultaneously increase net assets, which is conducive to repairing the company's balance sheet and creating conditions for an improvement in the company's fundamental business performance," Liu Shui said. Multiple industry analysts have pointed out that in the future, under the pressure of unstable new home sales and asset depreciation, real estate enterprises with greater debt repayment pressures will accelerate their debt restructuring processes, and increasing debt reduction ratios may become a widespread trend. Policy Environment Provides Support for Real Estate Enterprises' Debt Restructuring Behind the acceleration of real estate enterprises' debt restructuring lies the simultaneous improvement of the policy environment and market financing conditions. At the policy level, Li Yunze, Director of the National Financial Regulatory Administration, stated at a State Council Information Office press conference on May 7 that the government will expedite the introduction of a series of financing systems tailored to the new model of real estate development to help sustain and consolidate the stability of the real estate market. "This means that more supporting policies will be continuously implemented in the future, and loan support for enterprises will be continuously increased," Liu Shui said. It is expected that the "white list" policy for real estate project financing will continue to be refined to facilitate the substantial allocation of funds and improve the financial positions of enterprises. At the same time, the urban real estate financing coordination mechanism plays a positive role in ensuring the smooth construction and delivery of projects, stabilizing the confidence of financial institutions, alleviating the financial pressure on enterprises, promoting risk isolation and resolution, and driving improvements in market expectations, which is conducive to the smooth progress of debt restructuring work. A real estate industry analyst pointed out that it is expected that the role of policy support will become increasingly apparent. For example, the 4 trillion yuan financing white list and the acquisition and storage of existing housing and idle land by real estate enterprises will play a certain role in promoting the asset liquidation and debt repayment of distressed real estate enterprises. At the market level, financing costs for real estate enterprises have declined. Data from the China Index Academy shows that in May this year, the total bond financing of real estate enterprises was 28.88 billion yuan, up 23.5% YoY. The average interest rate for bond financing was 2.35%, down 0.43 percentage points YoY and 0.41 percentage points MoM. "In terms of institutional innovation in the future, tools such as tiered design of convertible bonds, service trusts, and optimization of M&A financing will be used to reshape the logic of debt restructuring for real estate enterprises. However, challenges such as the sustainability of sales recovery and slow credit repair still need to be addressed," said Zhang Bo. In fact, although the debt restructuring of real estate enterprises has accelerated, industry risks have not yet been fully cleared. Liu Shui believes that the success of a real estate enterprise's restructuring does not mean it is out of the woods. Successful debt restructuring will help mitigate risks, but for enterprises to truly emerge from the crisis, they still need the support of a market recovery. Only after their fundamentals improve can they avoid repeated extensions or restructuring.

Today, the three major indices of Hong Kong stocks extended their gains. By the close, the Hang Seng Index rose 1.07% to close at 23,906.97 points; the Hang Seng Tech Index climbed 1.93% to close at 5,319.96 points; and the Hang Seng China Enterprises Index gained 1.26% to close at 8,684.73 points. Note: Performance of the Hang Seng Index Notably, the Hang Seng Index has risen for three consecutive days. The Hang Seng Tech Index has followed a similar trend over the same period. Today's Market In terms of market performance, individual stocks in the semiconductor and real estate sectors strengthened, while those in the pharmaceutical, tea beverage, and shipping sectors weakened. Semiconductor Stocks Lead the Market By the close, Hongguang Semiconductor (06908.HK), Hua Hong Semiconductor (01347.HK), and SMIC (00981.HK) rose 10.87%, 4.23%, and 4.19%, respectively. Note: Performance of semiconductor stocks In terms of news, the World Semiconductor Trade Statistics (WSTS) released a report stating that the global semiconductor market size will reach $700.9 billion in 2025, up 11.2% YoY. In terms of market segments, the growth in the semiconductor market this year will be led by increases in logic and memory: both markets are driven by sustained demand in areas such as AI, cloud infrastructure, and advanced consumer electronics, with double-digit YoY growth rates. Policies Continue to Stimulate Real Estate Stocks By the close, Midea Real Estate (03990.HK), China Resources Land (01109.HK), and China Overseas Land & Investment (00688.HK) rose 4.38%, 3.56%, and 1.69%, respectively. Note: Performance of real estate stocks China Index Academy stated in an article that the total bond financing of national real estate enterprises in May was 28.88 billion yuan, up 23.5% YoY. In terms of financing structure, corporate bond financing in the real estate sector was 11.17 billion yuan in May, up 5.8% YoY, accounting for 38.7%; ABS financing was 17.71 billion yuan, up 38.1% YoY, accounting for 61.3%. The average interest rate for bond financing was 2.35%, down 0.43 percentage points YoY and 0.41 percentage points MoM. China Galaxy Securities analyzed that the continuous optimization of the policy environment has driven the recovery of financing for real estate enterprises. The premium transactions of high-quality land plots in core cities indicate a restoration of market confidence, and there is significant room for valuation recovery for real estate enterprises with high-quality land reserves. Most Pharmaceutical Stocks Adjusted By the close, SinoMab BioScience (03681.HK), Harbour BioMed (02142.HK), and Giant Biogene Holding (02367.HK) fell 17.19%, 9.83%, and 8.70%, respectively. Note: Performance of pharmaceutical stocks In terms of news, this adjustment was mainly influenced by profit-taking. Taking SinoMab BioScience as an example, the stock has risen by more than 110% over the past four trading days. Soochow Securities has cautioned that after the rapid rise of the innovative drug sector, attention should be paid to the valuation match, and it is recommended to focus on enterprises with international BD capabilities and commercialization implementation. Tea beverage stocks retreat after hitting new highs By the close of trading, Gu Ming (01364.HK), Mixue Group (02097.HK), and Cha Baidao (02555.HK) fell by 7.97%, 7.72%, and 7.72%, respectively. Note: Performance of tea beverage stocks In terms of news, analysts from Everbright Securities International stated that the valuations of some consumer stocks have already factored in growth expectations, and it is necessary to pay attention to the validation of same-store sales data in Q2. It is recommended to differentiate and treat targets with the ability to continuously expand stores. Other new consumer stocks also weaken simultaneously Laopu Gold (06181.HK), Maogeping (01318.HK), and Blukoo (00325.HK), which are also new consumer stocks listed in Hong Kong, also experienced adjustments, falling by 9.05%, 6.67%, and 3.64%, respectively. Taking Laopu Gold as an example, the market is concerned about the liquidity pressure brought by the lifting of the 69.05 million share lock-up at the end of June. In addition, the stock has accumulated a gain of 212% year-to-date. Individual stock movements Dongfeng Motor's H-shares plummet over 14%; controlling shareholder clarifies no restructuring plans for now Dongfeng Motor Group (00489.HK) fell by 14.45% to close at HK$3.61. According to an announcement in the morning, the controlling shareholder stated that it is currently not involved in any business restructuring. Xindong Games surges over 8% during trading; "Etheria" international server launches today Xindong Games (02400.HK) rose by 8.25% to close at HK$40. In terms of news, the strategy turn-based RPG mobile game "Etheria" developed by Xindong Games will officially launch its international server on June 5. Kaiyuan Securities believes that following the impressive performances of "Muffin Adventure" and "Xindong Town," which were launched in 2024, the launch of "Etheria" may further drive Xindong Games' earnings growth. Citi previously pointed out that the company may have more catalysts in H2, namely the launch of "Etheria" in mid-year and the overseas version of "Xindong Town" in H2. JL MAG Rare-Earth's H-shares surge over 12%; China's rare earth export controls trigger sharp jump in overseas rare earth prices JL MAG Rare-Earth (06680.HK) rose by 12.13% to close at HK$18.86. In terms of news, affected by China's rare earth export controls, overseas medium-heavy rare earth prices jumped by 15% in a single week. Guotai Junan Securities expects that the widening price spread between domestic and overseas markets will drive profit improvements for rare earth permanent magnet enterprises, with enterprises possessing overseas channel advantages benefiting significantly.

During this year's Dragon Boat Festival holiday, the performance of the new home market varied. Data released by Centaline Property on June 3 showed that a total of 46,100 m² of newly built commercial residential properties were sold in Shanghai during this year's Dragon Boat Festival holiday (5.31-6.2), up 87.4% YoY. "According to our monitored data, over 100 projects in Shanghai recorded sales contracts during the Dragon Boat Festival holiday. Most projects had single-digit sales, but there were still some popular projects with significant sales volumes. Among these, some high-quality projects, due to their large sales volumes, drove up the transaction data," said Lu Wenxi, Senior Research Manager at Centaline Property. In Wuhan, data released by the China Index Academy today showed that 571 newly built commercial residential properties were registered online in Wuhan during this year's Dragon Boat Festival holiday, with a registered area of 64,900 m², an increase of 26% compared to the holiday last year. It is understood that the increase in transaction volume in Wuhan during this year's Dragon Boat Festival holiday was mainly due to developers seizing the holiday opportunity to increase their marketing efforts and launch new projects. Many projects obtained sales permits and were launched before the holiday. Projects with good sales performance were mostly newly planned projects with significant product advantages, leading to better sales. In Shenzhen, according to statistics from the Shenzhen Centaline Research Center, during this year's Dragon Boat Festival holiday (5.31-6.2), 194 new residential properties (including both existing and pre-sale properties) were sold in Shenzhen, including 167 pre-sale new residential properties, down 23.4% compared to the Dragon Boat Festival holiday last year; 97 second-hand residential properties were sold, up 32.9% YoY. Meng Xinzeng, Senior Analyst at the China Index Academy, introduced that during this year's Dragon Boat Festival holiday, some projects in certain cities did perform well. However, overall, although most cities continued their previous sales promotions, the market performance remained relatively mediocre. He stated that, based on the market transaction situation in May, the MoM price increase of new homes in 100 cities expanded, while the second-hand home market continued the trend of "volume discount." According to data monitored by the China Index Academy, in May 2025, the average price of newly built residential properties in 100 cities nationwide was 16,815 yuan/m², up 0.30% MoM, with the increase expanding by 0.16 percentage points compared to April, and up 2.56% YoY. Several industry insiders told reporters that the increase in average prices was somewhat related to the driving factors of the transaction structure. "The active performance of improved housing projects has driven the continued increase in average prices in May, especially in first-tier cities, where the increase was more pronounced. Among these, first-tier cities saw a 0.9% MoM increase, with the growth rate rising by 0.53 percentage points compared to the previous month. At the same time, it should be noted that second-tier cities only saw a slight 0.06% MoM increase, a decrease from the 0.1% increase in the previous month, while third- and fourth-tier cities continued to see MoM declines."Li Yujia, the chief researcher at the Guangdong Provincial Housing Policy Research Center, said. Regarding this phenomenon, the president of the 58 Anjuke Research Institute told reporters that, from the supply side, mid-year is typically an important period for property sales. Developers tend to accelerate the launch of new projects in high-tier cities, and the increase in the supply of high-quality properties has become a significant force driving up market transaction activity. "Many real estate enterprises are currently betting on 'high-end improvement properties,' leading to a concentrated entry of high-quality projects in core cities. Additionally, the heat in the land market in core cities also spills over into the new home market. Cities like Beijing, Shanghai, and Hangzhou have all auctioned off plots with high total and unit prices. In particular, Hangzhou's overall premium rate significantly outpaces other cities, which has also played a role in boosting market enthusiasm and expectations," Zhang Bo said in an interview with reporters. Industry insiders pointed out that while projects in prime locations in some high-tier cities are selling well, it should also be noted that the MoM decline in second-hand housing prices widened in May, with varying degrees of pullbacks observed across all tier cities. Data from the China Index Academy showed that in May 2025, the average price of second-hand residential properties in 100 cities was 13,794 yuan/m², down 0.71% MoM, with the decline widening by 0.02 percentage points compared to March; it was down 7.24% YoY. Li Yujia introduced that since April, the listing volume of second-hand homes has continued to increase, particularly with a rise in the listing volume of large-sized units in the market. "The increase in replacement demand among some homeowners has led to a growth in the listing volume. The entry of improved new properties into the market has become more pronounced in competition with existing homes. Coupled with an increase in homeowners willing to sell at a discount, this has resulted in a more noticeable adjustment in second-hand home prices," Li Yujia said. In response, Zhang Bo also pointed out that due to policy adjustments in the new home market and concessions from developers, some homebuyers may shift to the new home market, intensifying competition in the second-hand home market. He predicts that if the listing volume of second-hand homes continues to increase, it may force second-hand home prices to continue to pull back. "From the perspective of the second-hand home market, due to factors such as land scarcity, large population inflows, and high levels of economic development in the core areas of hot cities, home prices are expected to remain relatively stable. Some scarce properties with location advantages may even see a slight rise. However, properties without unique location or resource advantages will face market competition pressures. For some small and medium-sized cities with large inventories, the destocking pressure in the second-hand home market remains significant, and it is still necessary to continue promoting transactions through measures such as price reductions," Zhang Bo added. Meng Xinzeng also believes that after the school district demand for second-hand homes has been released in stages, transactions are expected to gradually stabilize by mid-year. Under the influence of high listing volumes, "volume discount" will remain the mainstream in the second-hand home market in the short term.

Despite numerous challenges in the market, the overall real estate market continued to stabilize and recover, driven by sustained policy efforts and proactive strategic adjustments by enterprises. According to CRIC statistics, the top 100 real estate enterprises achieved sales operating revenue of 294.58 billion yuan in May this year, up 3.5% MoM. Data showed that over half of the top 100 real estate enterprises saw a MoM increase in their monthly performance in May, with 22 enterprises experiencing a MoM growth of over 30% in their monthly performance. Real estate enterprises such as Greentown China, CNOOC Real Estate, China Jinmao, Greenland Holdings, and PowerChina Real Estate all achieved significant MoM and YoY improvements in their monthly performance. "Driven by sales promotions by real estate enterprises and the supply of high-quality housing, new home sales in key cities increased MoM in May." Analysts from China Index Academy predicted that the policy environment for the real estate market in June would remain accommodative. Coupled with the arrival of the mid-year sales period, the pace of property launches and the intensity of sales promotions by real estate enterprises may increase, and the market in core cities is expected to continue its recovery. From a cumulative sales performance perspective, data from China Index Academy showed that from January to May 2025, the total sales of the top 100 real estate enterprises reached 1.44364 trillion yuan, down 10.8% YoY. There were 33 real estate enterprises with total sales exceeding 10 billion yuan, the same as the previous year. There were 64 real estate enterprises with sales between 5 billion and 10 billion yuan, a decrease of 6 from the previous year. Among them, Poly Developments and Holdings ranked first in the industry with sales of 116.1 billion yuan in the first five months, followed by Greentown China with 96.4 billion yuan, CNOOC Real Estate with 90.4 billion yuan in third place, China Resources Land with 86.85 billion yuan in fourth place, and China Merchants Shekou with 67.1 billion yuan in fifth place. The sixth to tenth places in the industry were occupied by Vanke, C&D Real Estate, Yuexiu Property, Binjiang Group, and Huafa Industrial, with sales of 57 billion yuan, 56.1 billion yuan, 50.8 billion yuan, 43.36 billion yuan, and 43.26 billion yuan, respectively. As the sales market gradually stabilizes, significant changes have also occurred in the land acquisition strategies of real estate enterprises. In terms of land acquisition, from January to May 2025, the total land acquisition amount of the TOP 100 enterprises reached 405.19 billion yuan, up 28.8% YoY. In terms of new inventory value, Poly Developments and Holdings, Greentown China, and China Jinmao ranked among the top three. From January to May 2025, Poly Developments and Holdings topped the list with a new inventory value of 72.8 billion yuan, followed by Greentown China with 72.3 billion yuan, and China Jinmao with a new inventory value of 60.3 billion yuan, ranking third. "When acquiring land, real estate enterprises are increasingly focusing on core first- and second-tier cities," said Wang Ying, Managing Director of Corporate Ratings, Asia Pacific, at Fitch Ratings. Since Q4 last year, well-performing real estate enterprises have mainly been those state-owned enterprises with substantial land reserves in core first- and second-tier cities. However, real estate enterprises with large land reserves in third- and fourth-tier cities have not significantly benefited from the housing market recovery due to a lack of high-grade sellable resources. Meanwhile, weak sales have led to a continuous decline in operating cash flow, further constraining these enterprises' ability to acquire land in core areas of key cities. At the policy level, promoting the sustained recovery of the market remains an important policy goal for the real estate sector this year. Analysts from the China Index Academy believe that various policies are expected to continue to be implemented at an accelerated pace, with specific policies mainly focusing on urban village renovation, the supply of high-grade housing, and the acquisition of existing commercial housing inventory. "High-quality housing" has also become an important factor in driving market recovery. In recent years, the central government has repeatedly set the direction for the construction of "high-quality housing." In 2025, "high-quality housing" was included in the Government Work Report for the first time, proposing to "adapt to the people's high-grade living needs, improve standards and specifications, and promote the construction of safe, comfortable, green, and intelligent 'high-quality housing'," reflecting the government's high emphasis on the construction of "high-quality housing." On March 31, the Ministry of Housing and Urban-Rural Development issued the national standard "Code for Residential Projects," which sets clear regulations on aspects such as the floor height of residential buildings, sound insulation performance of walls and floor slabs, elevator configuration requirements, and the net height of balcony railings. The code was officially implemented on May 1. At the same time, many localities have issued guidelines or relevant technical regulations for high-grade residential design over the past two years, with some implementation standards higher than the new version of the "Code for Residential Projects" to meet residents' demand for high-grade housing. In early May, the Beijing Municipal Commission of Housing and Urban-Rural Development issued the "2025 Beijing Annual Housing Development Plan," emphasizing the continuous promotion of the stabilization and improvement of the real estate market, vigorously constructing "high-quality housing," and better meeting diversified housing needs. Against the backdrop of policies advocating for "high-quality housing," real estate enterprises have also launched "high-quality housing" product systems. As a representative of the first batch of "high-quality housing" projects in Daxing District, Beijing, Xingchuang proposed the concept of "climate adaptability," considering Beijing's geographical factors to redesign supporting facilities necessary for livability. Its Muchun Villa project in Daxing adopts multiple high technologies to construct the Muchun series of high-quality housing products. "From the perspective of transaction structure, improvement-oriented demand has become an important support for the new housing market, with the proportion of transactions for units above 120 m² in key cities increasing in the first four months," said Wang Ying, Managing Director of Corporate Ratings, Asia Pacific, at Fitch Ratings. The aforementioned analyst from the China Index Academy stated that for enterprises, comprehensively enhancing their overall strength in areas such as cost control, product design, technological adaptation, and market positioning has become an important factor in improving their product competitiveness.

Macro News 1. On the afternoon of May 22, Chinese President Xi Jinping had a phone conversation with French President Emmanuel Macron at the latter's request. President Xi pointed out that during his visit to France in May last year, both sides agreed to carry forward the spirit of China-France diplomatic relations, which is characterized by independence, mutual understanding, foresight, and mutual benefit and win-win results, and to endow it with new connotations of the times. Since then, China-France cooperation has achieved many new developments. Both sides should strengthen strategic communication and build consensus. They should seize opportunities to deepen cooperation in traditional areas such as investment, aerospace, and nuclear energy, and expand cooperation in emerging areas such as digital, green, biomedical, and silver economy. They should also enhance people-to-people exchanges and promote friendship between the two peoples. 2. He Lifeng, Member of the Political Bureau of the CPC Central Committee and Vice Premier of the State Council, met with Jamie Dimon, Chairman and CEO of JPMorgan Chase & Co., on the evening of the 22nd. He Lifeng expressed welcome to US enterprises, including JPMorgan Chase & Co., to continue deepening mutually beneficial cooperation with China and to contribute to the healthy, stable, and sustained development of China-US economic and trade relations. Jamie Dimon positively evaluated the outcomes of the US-China economic and trade talks and expressed his willingness to continue to deepen involvement in China's capital market, better serve multinational corporations expanding their businesses in China, and support Chinese companies in their overseas development. 3. Yesterday, the State Council Information Office held a press conference. Guo Wuping, spokesperson of the National Financial Regulatory Administration and Director General of the Policy Research Department, stated that the third batch of pilot reforms for long-term investment of insurance funds would be approved soon, with a scale of 60 billion yuan. Yan Bojin, Director General of the Issuance Supervision Department of the China Securities Regulatory Commission, stated that the fifth set of listing criteria for the Science and Technology Innovation Board would be implemented prudently to promote the implementation of new typical cases; the domestic listing environment for technology companies would be continuously optimized to support the return of high-quality red-chip technology companies for domestic listing; and a more flexible and precise counter-cyclical adjustment mechanism for new share issuance would be implemented. 4. He Yongqian, spokesperson of the Ministry of Commerce, presided over a regular press conference yesterday. A reporter asked about the US export controls on AI chips. He Yongqian stated that China firmly opposes this and will closely monitor subsequent developments by the US side, taking resolute measures to safeguard its legitimate rights and interests. 5. The People's Bank of China announced that to maintain ample liquidity in the banking system, it would conduct a 500 billion yuan Medium-term Lending Facility (MLF) operation today through fixed-quantity, interest-rate tendering, and multiple-price bidding, with a term of one year. 6. The Ministry of Commerce reported on China's outbound investment and cooperation in the first four months of this year. From January to April 2025, China's outbound direct investment across all industries amounted to 57.54 billion US dollars, up 7.5% YoY. Among this, outbound non-financial direct investment was 51.04 billion US dollars, up 5.6% YoY. Non-financial direct investment in countries participating in the Belt and Road Initiative was 12.78 billion US dollars, up 16.4% YoY. Industry News 1. The China Society of Automotive Engineers officially released the group standard "Determination Method for All-Solid-State Batteries," clearly defining all-solid-state batteries for the first time. The new standard stipulates that "all-solid-state batteries" must achieve ion transfer exclusively through solid electrolytes, establishing a strict technical demarcation from hybrid solid-liquid electrolyte batteries. 2. Last night, Xiaomi unveiled its first 3-nanometer flagship processor, the "Xuanjie O1," independently developed and designed by the company. The processor is integrated into Xiaomi's latest flagship smartphone and tablet products. Additionally, the Xiaomi YU 7 was officially launched at yesterday's event. The YU 7 is equipped with Xiaomi's Super Motor V6s Plus, delivering a maximum horsepower of 690PS. It accelerates from 0 to 100 km/h in 3.23 seconds, reaches a top speed of 253 km/h, and has a shortest braking distance from 100 to 0 km/h of 33.9 meters. 3. He Yongqian, spokesperson for the Ministry of Commerce, introduced that according to statistics from relevant departments, from September 2024 to April 2025, retail sales of home appliances maintained double-digit growth for eight consecutive months. In April, retail sales of home appliances and audio-visual equipment by enterprises above designated size increased by 38.8% year-on-year, ranking first among the 16 major categories of consumer goods in terms of growth rate. 4. In response to reports of HiPhi Auto's alleged "resurrection," Lanjing Auto called HiPhi's official customer service hotline. Staff members stated that there was no news at present, that the company had not yet announced information on resuming work and production, nor had it opened order bookings. Currently, the company is still undergoing restructuring. 5. Miao Bo, Deputy Director of the Science and Technology Department of the National Radio and Television Administration, stated at the 5th China (Beijing) Radio and Television Media Integration Development Conference on the 22nd that it is necessary to plan and promote the healthy and sustainable development of artificial intelligence in the radio, television, and audiovisual sectors with a higher stance, deeper understanding, broader perspective, and wider vision. 6. BYD's EV sales in Europe surpassed Tesla's for the first time, overtaking the US brand, which has long dominated the European EV market. According to data from market research firm Jato Dynamics, BYD registered 7,231 new EV sales in April, representing a 169% increase compared to the same period last year, placing BYD among the top 10 EV brands in terms of sales. 7. According to a report by CRIC Real Estate Research, as of the end of 2024, the total land reserves of the TOP 100 real estate enterprises amounted to 25.23 trillion yuan, a 13% decrease from the end of last year. Based on the TOP 100 real estate enterprises' total land reserve value rankings, the weighted average de-stocking period for the land reserves of the top 100 enterprises as of the end of 2024 was 6.93 years, a record high. 8. It is reported that the cryptocurrency exchange Kraken plans to allow non-US customers to trade popular stocks such as Apple, Tesla, and Nvidia in tokenized form through digital ledgers. The company stated that such "tokenized stocks" will make it easier for non-US investors to invest in US stocks. Company News 1. Xinhua Insurance announced that it would invest 10 billion yuan to subscribe for shares in private equity funds. 2. Daqian Ecology announced that Xinhua Publishing Group and Wang Zheng'an plan to jointly reduce their holdings by no more than 3.3% of the company's shares. 3. Nanjing Port announced that its holding subsidiary does not directly participate in import and export trade. 4. Zangge Mining announced that it had received a cash dividend of 1.539 billion yuan from its participating company, Julong Copper. 5. Laysen & Thorne announced that it had not signed any major contracts recently, and its production costs, sales, and other conditions were normal. 6. Tiantie Technology announced that it had signed a strategic cooperation framework agreement with Xinjie Energy, planning to cooperate in solid-state battery lithium metal anode materials and related fields. 7. Sany Heavy Industry announced that it had submitted an application for the listing and issuance of H shares to the Hong Kong Stock Exchange and published the application materials. 8. Changan Automobile stated in its investor relations activity record that it would launch 35 new digital and intelligent vehicles in the next three years and achieve solid-state battery vehicle installation verification by 2026. 9. Cao Peng, Chairman of the Technical Committee of JD Group and President of JD Cloud Business Unit, revealed that 14,000 intelligent agents had been put into "competition," with digital humans achieving sales performance exceeding 80% of human anchors. 10. 3S Bio announced that it had reached a cooperation agreement with Pfizer on Project 707, with uncertainty regarding the actual sales milestone payments and royalties received by the licensor. 11. Hongchuang Holding announced that it planned to purchase 100% of the equity in Hongtuo Industrial for 63.518 billion yuan. 12. Demashi announced that the company's actual controller would change from He Jianping to Pan Yi, and its shares would resume trading. Global Markets 1. The three major US stock indices closed with mixed changes. The Dow closed flat, the Nasdaq rose 0.28%, and the S&P 500 fell 0.04%. Most popular Chinese ADRs closed lower, with the Nasdaq Golden Dragon China Index falling 1.18%. 2. WTI crude oil futures closed down 0.6% at $61.20 per barrel; Brent crude oil futures closed down 0.72% at $64.44 per barrel. 3. COMEX gold futures closed down 0.56% at $3,295.1 per ounce, and COMEX silver futures closed down 1.39% at $33.18 per ounce. Investment Opportunities Reference 1. XPeng Motors plans to launch humanoid robots for industrial and commercial scenarios in 2026 According to media reports, at XPeng Motors' Q1 2025 earnings call, XPeng Motors Chairman He Xiaopeng stated that XPeng's physical world foundation large model would be fully applied in the AI automotive field in 2025, while a larger-scale cloud foundation large model and edge-side model were also under development. Next, XPeng Motors will advance from the R&D of L2+ assisted driving to higher-level autonomous driving technologies, specifically L3 and L4. The company aims to launch humanoid robots for industrial and commercial applications by 2026, leveraging data-driven evolution through mass production scenarios. Minsheng Securities believes that the inflection point for the industrialisation of humanoid robots has been established, with three key drivers opening up a trillion-yuan market. The humanoid robot sector is transitioning from thematic investment to growth investment, with 2025 expected to be the first year of global mass production. On the technology front, large models have broken through the versatility bottleneck, and DeepSeek's low-cost training paradigm is accelerating the deployment of AGI. On the industrial front, tech giants such as Tesla, NVIDIA, and Huawei are intensively deploying in this area. On the policy front, the government work report clearly states the need to cultivate future industries such as embodied intelligence and vigorously develop intelligent robots. 2. One of the emerging tracks in AI hardware, with overall demand radiating across all age groups It is reported that, as one of the emerging tracks in AI hardware, the AI toy market is growing rapidly. According to data from consulting firm IMARC Group, the market size reached $18.1 billion in 2024 alone, accounting for nearly 20% of the $108 billion global toy market in the same year. Northeast Securities believes that AI toys have endowed toys with the ability to "move," namely, triple capabilities of interaction, companionship, and education (Q&A). Overall demand is radiating across all age groups. AI is expected to become the core catalyst for the toy market after trendy IPs, with potential far exceeding that of the Z-generation during the boom of trendy toys. From a neutral perspective, the penetration rate of AI toys is expected to at least match that of trendy toys. It is projected that the domestic penetration rate will reach 29%, 41%, and 47% by 2026, 2028, and 2030, respectively, with the domestic market potentially approaching 85 billion yuan by 2030. 3. The increasingly diversified needs of companies going global, with policy guidance expected to open up new growth spaces for the industry According to media reports, as the financial service needs of companies going global become increasingly diversified, more and more domestic cross-border payment institutions are actively seeking higher-value overseas payment licenses as the foundation for upgrading their cross-border fund collection, payment, and exchange services. Guotai Haitong Securities pointed out that the plan proposed by the People's Bank of China and three other departments aims to enhance the functionality and global network coverage of the Cross-border Interbank Payment System (CIPS) and promote more banks to join CIPS. In addition, the State Council has deployed and implemented a strategy to upgrade pilot free trade zones and advance high-level opening up. Policy guidance is expected to support the cross-border payment industry in opening up new growth spaces. 4. The National Press and Publication Administration announces approval information for online games in May According to media reports, the National Press and Publication Administration announced the approval information for domestic online games in May, with a total of 130 games approved in May. So far this year, a total of 610 domestic games have been approved. In addition, the National Press and Publication Administration also released the approval information for imported online games in 2025, with a total of 14 imported games approved in May. Since the beginning of this year, a total of 44 imported games have been approved. In May, the issuance of game licenses proceeded at a steady pace, with the total number of domestic game approvals remaining above 100. Overall, the supply side continued to release, the trend of normalized license issuance remained firm, and the pace of industry recovery continued to advance. Wanlian Securities stated that, from the perspective of fund overweight allocations and valuation levels in the SW Media industry in Q1 2025, valuation levels have significantly recovered. The industry as a whole is still in an underweight allocation range, with significant room for improvement. Leading companies in the gaming and advertising & marketing sectors are the core focus of institutional attention. It is recommended to pay attention to gaming companies with abundant game license reserves and AI application layouts, as well as leading companies in the digital marketing and elevator media sectors.