Date of Report: September 26, 2024
Broker: CGS International Securities

COLI Overview

China Overseas Land & Investment (COLI) is identified as one of the top picks in the property sector by analysts in the September 2024 report. COLI stands to benefit from the recent policy measures aimed at stabilizing China’s property market, which has experienced significant downturns in sales and pricing throughout 2024.

Positive Policy Impact on the Property Market

Following the unexpected Politburo meeting on September 26, 2024, China’s government has introduced a series of measures to revitalize the struggling property sector. These policies, which follow the major policy package announced on September 24, 2024, focus on reversing the downward trend in property prices and improving sales volume. In the first eight months of 2024, property sales in China dropped by 18% in terms of area and 23.6% in terms of value, highlighting the need for urgent intervention.

Government Support for Property Sector

Key policy measures designed to stabilize the property market include a reduction in mortgage rates, a lowering of downpayment requirements for second homes, and increased financial support for “white list” property projects. COLI, as a leading property developer, is expected to benefit from these supportive measures aimed at boosting demand and easing financial constraints for homebuyers. The government’s focus on stabilizing the market through enhanced liquidity and favorable financial conditions directly supports COLI’s business prospects.

Focus on Inventory Management and Sector Recovery

One of the government’s key objectives is to manage excess property inventory, and COLI is well-positioned to take advantage of these policies. The new measures encourage the stabilization of property prices and the optimization of unsold inventories, which is critical for developers. With the government taking an active role in supporting loan availability and creating favorable conditions for homebuyers, COLI is expected to experience improved market conditions that will enhance its growth prospects.

Long-Term Sector Outlook

The report indicates that China’s property market is a significant focus of the government’s economic recovery plans. As a top player in the sector, COLI is expected to benefit from increased demand for housing and more favorable market conditions created by the government’s intervention. These policy efforts should help stabilize the market and potentially reverse the declines in property sales and values seen in 2024.

Conclusion

The September 26, 2024, report by CGS International Securities highlights COLI as a preferred pick in the property sector, benefiting from China’s recent policy measures. As the government rolls out more detailed initiatives aimed at revitalizing the property market, COLI is well-positioned to capitalize on these opportunities and strengthen its market position.