2014 China Property Outlook:In like a lion, out like a lamb

After a roaring start in the first quarter, China’s propertymarket in 2014 is likely to soften under a succession of pricecurbs, credit tightening and slowing sales growth. The sector’ssalvation at the moment seems to rest in the country’saggressive move to urbanize and, to a lesser degree, thegovernment’s proposed property control mechanism. Bothshould provide a modicum of support to valuations in 2014F.

We expect China’s property names to enjoy a sector-wide rallyin 1Q14F followed quickly by profit taking in 2Q14F ahead ofnew launches in 3-4Q14F. Our top property picks for 2014Fare COLI (688 HK), Shimao Property (813 HK), GreentownChina (3900 HK) and Shenzhen Investment (604 HK).