Broker: UOB Kay Hian
Date of Report: 3 June 2025
China and Hong Kong Property Market: Top Picks, Sector Ratings & Recovery Insights for 2025
Executive Summary
The latest property market analysis from UOB Kay Hian offers a comprehensive view of the China and Hong Kong property sectors as of June 2025. The report highlights manageable pressure in the mainland property market, improved tourism and retail sales in Hong Kong, and delivers a detailed peer comparison across leading real estate companies. Investors, analysts, and market followers will find actionable insights, sector ratings, and company-specific forecasts to guide their decisions in the dynamic Asia property landscape.
Peer Comparison: Key Metrics for Leading Property Stocks
| Company |
Ticker |
Rec |
Share Price (HK\$) |
Target Price (HK\$) |
Upside (%) |
Market Cap (HK\$ m) |
PE 2026F (x) |
PE 2027F (x) |
P/B 2026F (x) |
P/B 2027F (x) |
Yield 2026F (%) |
Yield 2027F (%) |
| China Resources Land Ltd |
1109 HK |
BUY |
25.05 |
32.42 |
29.4 |
178,630.0 |
6.5 |
6.1 |
0.5 |
0.4 |
5.7 |
6.1 |
| Sunac China Holdings Limited |
1918 HK |
SELL |
1.36 |
1.06 |
-22.1 |
14,572.9 |
nm |
nm |
0.4 |
0.0 |
0.0 |
0.0 |
| China Overseas Land |
688 HK |
BUY |
12.92 |
16.67 |
29.0 |
141,407.9 |
7.7 |
7.1 |
0.3 |
0.3 |
4.9 |
5.3 |
| Longfor Properties |
960 HK |
BUY |
9.33 |
11.58 |
24.1 |
65,190.4 |
9.9 |
8.7 |
0.4 |
0.4 |
3.2 |
3.6 |
| New World Development |
17 HK |
HOLD |
4.48 |
4.03 |
-10.0 |
11,274.5 |
8.0 |
4.8 |
0.1 |
0.1 |
0.0 |
0.0 |
| Sun Hung Kai Properties |
16 HK |
BUY |
83.05 |
103.14 |
24.2 |
240,660.7 |
10.7 |
10.3 |
0.4 |
0.3 |
4.6 |
4.0 |
| Kerry Properties |
683 HK |
BUY |
18.58 |
22.70 |
22.2 |
26,965.3 |
8.7 |
5.4 |
0.2 |
0.2 |
7.3 |
7.3 |
| Wharf Real Estate Investment Co Ltd |
1997 HK |
BUY |
19.42 |
23.09 |
18.9 |
58,963.5 |
8.4 |
8.1 |
0.3 |
0.3 |
7.4 |
7.6 |
| Link REIT |
823 HK |
BUY |
41.15 |
44.90 |
9.1 |
106,265.6 |
14.4 |
14.2 |
0.5 |
0.5 |
6.4 |
6.5 |
| Hysan Development |
14 HK |
BUY |
12.82 |
14.21 |
10.8 |
13,166.2 |
7.3 |
6.9 |
0.2 |
0.2 |
8.8 |
9.4 |
Sector Ratings and Top Picks
- China Property: OVERWEIGHT
- Hong Kong Property: MARKET WEIGHT
- Hong Kong Landlord: UNDERWEIGHT
Top sector picks are China Resources Land (CR Land), Sun Hung Kai Properties (SHKP), and LINK REIT, reflecting strong fundamentals and attractive risk-reward profiles.
China Property Market: Trends and Insights
The mainland property market showed a month-on-month increase but a year-on-year decline in new home sales for May 2025. Data from 28 cities:
- Average daily sales volume of new homes rose 12.1% month-on-month but dipped 0.2% year-on-year.
- Tier 1/2/3/4 cities saw mom sales increases of 9.5%, 11.1%, 15.9%, and 16.9%, respectively.
- Year-on-year, Tier 1 and some Tier 3 cities grew, while other tiers and lower-tier cities remained weak.
| City |
May 24 (000 sqm) |
Apr 25 (000 sqm) |
May 25 (000 sqm) |
May 25 YoY (%) |
May 25 MoM (%) |
| Beijing |
12.4 |
15.0 |
14.6 |
17.9 |
-2.5 |
| Shanghai |
28.4 |
25.8 |
28.6 |
0.8 |
11 |
| Guangzhou |
18.1 |
17.7 |
24.1 |
33.4 |
36.0 |
| Shenzhen |
7.9 |
9.7 |
7.3 |
-6.6 |
-24.4 |
| Wuhan |
23.3 |
21.1 |
28.6 |
22.8 |
36.0 |
| Qingdao |
40.0 |
38.1 |
39.5 |
-1.4 |
3.6 |
| Suzhou |
8.7 |
5.9 |
7.9 |
-9.1 |
32.6 |
| Fuzhou |
3.9 |
4.3 |
3.9 |
-1.9 |
-10.6 |
| Chengdu |
42.5 |
34.5 |
29.1 |
-31.6 |
-15.7 |
| Nanning |
10.5 |
9.3 |
14.8 |
40.7 |
59.4 |
In lower-tier cities, performances were mixed, with some cities (e.g., Jiaxing, Jiangmen) posting outsized year-on-year growth, while others fell sharply.
Secondary Market and Supply Dynamics
- The top 100 developers experienced a 17.3% year-on-year decline in gross contracted sales in May 2025.
- Secondary home sales in major Tier 1 and 2 cities showed a 23.9% and 3.9% year-on-year rise, respectively, despite negative month-on-month growth.
- Supply in Tier 1 cities remained stable, with improved inventory months and saleable GFA in cities like Beijing and Shanghai.
Major Developers: May 2025 Contracted Sales
| Company |
Type |
May 25 (Rmbm) |
Apr 25 (Rmbm) |
MoM (%) |
May 24 (Rmbm) |
YoY (%) |
5M25 (Rmbm) |
5M24 (Rmbm) |
5M25 YoY (%) |
| Poly |
SOE |
28,500 |
24,622 |
15.8 |
35,314 |
-19.3 |
116,100 |
131,321 |
-11.6 |
| Vanke |
Quasi-SOE |
11,120 |
10,200 |
9.0 |
23,330 |
-52.3 |
57,040 |
102,200 |
-44.2 |
| CR Land |
SOE |
18,350 |
17,300 |
6.1 |
20,700 |
-11.4 |
86,850 |
92,700 |
-6.3 |
| CMSK |
SOE |
17,350 |
14,764 |
17.5 |
19,016 |
-8.8 |
67,130 |
77,847 |
-13.8 |
| CGH |
POE |
3,090 |
3,080 |
0.3 |
4,290 |
-28.0 |
13,970 |
21,650 |
-35.5 |
| COLI |
SOE |
24,080 |
20,164 |
19.4 |
19,700 |
22.2 |
90,400 |
101,701 |
-11.1 |
| Longfor |
POE |
6,320 |
5,130 |
23.2 |
8,690 |
-27.3 |
28,440 |
41,080 |
-30.8 |
| Greentown |
SOE |
17,610 |
11,400 |
54.5 |
15,500 |
13.6 |
65,330 |
68,000 |
-3.9 |
| Yuexiu |
SOE |
9,500 |
10,293 |
-7.7 |
10,078 |
-5.7 |
50,800 |
40,091 |
26.7 |
| Jinmao |
SOE |
12,450 |
7,001 |
77.8 |
7,220 |
72.4 |
37,750 |
31,240 |
20.8 |
| Seazen |
POE |
1,960 |
1,761 |
11.3 |
4,102 |
-52.2 |
8,820 |
19,754 |
-55.4 |
| Sunac |
POE |
4,900 |
1,100 |
345.5 |
2,270 |
115.9 |
16,000 |
24,720 |
-35.3 |
| CIFI |
POE |
1,750 |
1,720 |
1.7 |
3,340 |
-47.6 |
8,900 |
17,460 |
-49.0 |
| Shimao |
POE |
2,130 |
2,001 |
6.4 |
2,920 |
-27.1 |
11,200 |
14,220 |
-21.2 |
| Sino Ocean |
Quasi-SOE |
2,410 |
2,810 |
-14.2 |
2,440 |
-1.2 |
10,390 |
12,680 |
-18.1 |
| Agile |
POE |
930 |
490 |
89.8 |
1,650 |
-43.6 |
4,240 |
8,200 |
-48.3 |
Hong Kong Property and Retail Market: Stabilization and Opportunity
Property Price and Sentiment Indices
- The CCL index fell 1.8% year-to-date, with a 0.8% week-on-week drop by late May 2025.
- The CVI index, reflecting banks’ property price expectations, hovered around the neutral 40-point range since February.
Tourism and Retail Sales Momentum
- Mainland tourist arrivals to Hong Kong surged 18.9% year-on-year in May 2025.
- Hong Kong residents’ outbound travel to mainland China increased 19.2%.
- Retail sales in Hong Kong declined by only 2.3% in April, a marked improvement from a 6.5% fall in 1Q25.
- Jewellery, watches, and valuable goods posted a narrower 1.7% decline; clothing and shoes fell 5.1% year-on-year, both better than previous quarters.
| Segment |
May 25 Daily Avg. (‘000) |
YoY (%) |
5M2025 Daily Avg. (‘000) |
YoY (%) |
| Mainland visitors to HK |
100.7 |
18.9 |
100.5 |
10.0 |
| HK residents to Mainland China |
284.0 |
19.2 |
283.1 |
18.2 |
Company-by-Company Analysis
China Resources Land Ltd (1109 HK)
- BUY rating, target price HK\$32.42 (current: HK\$25.05, 29.4% upside)
- 2026F/2027F PE: 6.5x/6.1x, P/B: 0.5x/0.4x, Yield: 5.7%/6.1%
- Robust fundamentals and strong sector positioning make CR Land the top pick for China.
Sunac China Holdings Limited (1918 HK)
- SELL rating, target price HK\$1.06 (current: HK\$1.36, -22.1% downside)
- PE not meaningful due to ongoing challenges; no dividend yield expected.
- Continues to face operational headwinds and remains unattractive at current valuation.
China Overseas Land (688 HK)
- BUY rating, target price HK\$16.67 (current: HK\$12.92, 29.0% upside)
- 2026F/2027F PE: 7.7x/7.1x, P/B: 0.3x/0.3x, Yield: 4.9%/5.3%
- Maintains resilient growth and attractive valuations.
Longfor Properties (960 HK)
- BUY rating, target price HK\$11.58 (current: HK\$9.33, 24.1% upside)
- 2026F/2027F PE: 9.9x/8.7x, P/B: 0.4x/0.4x, Yield: 3.2%/3.6%
- Recovering from sales declines with improving fundamentals and value.
New World Development (17 HK)
- HOLD rating, target price HK\$4.03 (current: HK\$4.48, -10.0% downside)
- 2026F/2027F PE: 8.0x/4.8x, P/B: 0.1x/0.1x, Yield: 0.0%
- Lack of dividend and limited upside keep this stock on hold.
Sun Hung Kai Properties (16 HK)
- BUY rating, target price HK\$103.14 (current: HK\$83.05, 24.2% upside)
- 2026F/2027F PE: 10.7x/10.3x, P/B: 0.4x/0.3x, Yield: 4.6%/4.0%
- Top Hong Kong pick with rising rental yields and stable demand outlook.
Kerry Properties (683 HK)
- BUY rating, target price HK\$22.70 (current: HK\$18.58, 22.2% upside)
- 2026F/2027F PE: 8.7x/5.4x, P/B: 0.2x/0.2x, Yield: 7.3%/7.3%
- Attractive dividend yield and improving valuations.
Wharf Real Estate Investment Co Ltd (1997 HK)
- BUY rating, target price HK\$23.09 (current: HK\$19.42, 18.9% upside)
- 2026F/2027F PE: 8.4x/8.1x, P/B: 0.3x/0.3x, Yield: 7.4%/7.6%
- Strong yield and stable performance in challenging landlord segment.
Link REIT (823 HK)
- BUY rating, target price HK\$44.90 (current: HK\$41.15, 9.1% upside)
- 2026F/2027F PE: 14.4x/14.2x, P/B: 0.5x/0.5x, Yield: 6.4%/6.5%
- Top pick in the landlord sector; resilient yield despite retail headwinds.
Hysan Development (14 HK)
- BUY rating, target price HK\$14.21 (current: HK\$12.82, 10.8% upside)
- 2026F/2027F PE: 7.3x/6.9x, P/B: 0.2x/0.2x, Yield: 8.8%/9.4%
- Offers high dividend yield and value for investors seeking income.
Strategy and Outlook
- China Property Sector: Maintain OVERWEIGHT. Weak but divergent buyer sentiment, with further policy support likely to be mild. CR Land remains the top pick.
- Hong Kong Property Sector: Maintain MARKET WEIGHT. Rising rental yields, stable supply-demand, and expectations of a rate cut support stabilization. SHKP is the preferred play.
- Hong Kong Landlord Sector: Maintain UNDERWEIGHT. Retail sales remain challenging, but a lower base in 2Q-3Q 2024 should support improvement. LINK REIT is the top pick.
Conclusion: Navigating 2025 With Data-Driven Confidence
Despite sector-specific headwinds, the China and Hong Kong property markets show resilience and recovery potential into the second half of 2025. Top picks—CR Land, SHKP, and LINK REIT—offer attractive value propositions for investors seeking exposure to Asia’s evolving property markets.
