China property weekly trend:Vol rose and inventory declined;land sales contracted

Highlights for the week

Vol followed the recovery in the past two weeks,+8% wow/+16% yoy, and 15% higher than the Janweekly average. Kunming topped the performancewith +132% wow/+271% yoy. YRD cities withouttightening outperformed, e.g., Ningbo (+65% wow)and Xuzhou (+41% wow). Inventory declined 0.5%wow and 12m moving average inventory monthsstood at 8.6 months. Inventory in Ningbo (-4%) andNanjing (-2%) decreased the most due to strongtransaction volume. Land transactions rewoundfrom the rebound in the previous week, withvol/value -35%/-86% wow. Top 10 cities’ averageland sales was Rmb1.9bn (vs Rmb7.5bn last week),led by Zhongshan (Rmb3.5bn), Shanghai(Rmb3.5bn) and Shenyang (Rmb2.9bn).

Key news/events

1) MOHURD signaled that it would acceleratelegislation for the property tax and rental market.2) Nanjing announced plans to curb theoverheating property market with enhanced ASPguidance for developers.

Performance & Valuation

Sunac and CMSK were the strongest share priceperformers in the past week among our offshoreand onshore coverage. Our offshore coverage isnow trading at an average 46% discount to end-2017E NAV and 1.0X 2017E P/B, vs. 2H2013-2014down-cycle averages of 43% and 1.1X. Our onshorecoverage is trading at an average 30% discount and1.6X 2017E P/B, vs. 2H2013-2014 downcycleaverages of 52% and 1.6X. Top picks (CL-Buy):COLI, COGO and Poly (A) with 12m end-17E NAVbasedTPs of HK$31.0, HK$3.70, and Rmb11.60.