China Real Estate Developers :Vol. slightly dropped wow; inventory largely flat in 2nd week of Nov

Nov 05-Nov 11 transaction volume and ASP

On a wow basis, 21 of the 33 cities with data available saw volumedecrease, with a group median of -6% (vs. +2% for the week ended Nov04). On a yoy basis, 30 cities with data available saw volumes increase,with a group median of +115% (vs. +118%). Compared with the Oct 2012weekly average, 22 of 33 cities with data available saw volume increase,with a group median of +9% (vs. +27%). Relatively, volumes in Pan-BohaiRim & North China were better than other regions. In terms of ASP, on awow basis, 7 of 10 cities with data available on median level saw pricesdecreased wow, with a group median of -3% (vs. +3%); on a 3-monthcumulative basis, 6 of 11 cities with data available saw prices decrease,with a group median of -0.6% from the prior 3-month average.

Ytd performance

As of end Nov 11, 35 cities with data available saw average weekly vol in Nov38% higher than Oct average and 78%, 95% higher than 1H12 and 2011average respectively. Ytd, 20 of the 26 cities with data available on a medianlevel saw volumes increase with a group median of 24% yoy (vs. +22%). Interms of ASP, 17 out of the 27 cities saw prices decrease ytd, with a groupmedian of -3% yoy (vs. -3%).

Inventory levels

Total inventory for 13 cities was down 0.9% wow (vs. -0.3% for the weekended Nov 4). According to the 12-mth rolling GFA sold, average inventorytake-up time (for the 13 cities we track) dropped to 13.4 months comparedwith 13.8 for the week ended Nov 4. Among the 13 cities: 1) inventorydeclined in Beijing, Shenzhen, Guangzhou, Fuzhou, Suzhou, Xiamen andDongguan, Hangzhou and Ningbo; 2) inventory is stable in Shanghai,Qingdao and Changchun; 3) inventory is still growing in Nanjing.

Investment view

Buy ideas: BCD (CL), Greentown(CL), Longfor(CL), Sunac, Poly Property(H),Evergrande, Country Garden, CRL, Vanke(A)/(B), Poly(A), Zhongnan,Gemdale, WorldUnion and Lushang. Sell ideas: Yanlord, PCRT, OCT, andCWTC. Downside risks: further government policy tightening and/or macrohard landing. Upside risks: unexpected policy easing that leads tostronger-than-expected price recovery.