Real Estate Developers:National property market monthly tracker September 2010

National commodity property transaction volumes in Sept. came in atGFA105mn sqm, up 53% mom and 17% yoy vs. a 6% mom and 10% yoyincrease in Aug. Ytd as of end-Sept, volumes achieved GFA632mn sqm, up 8%yoy, rising from 7% in Aug. Meanwhile, Sept. ASP was up 3% mom and 15%yoy to Rmb5,238/sqm, resulting in Sept. property sales of Rmb550bn, up 57%mom and up 35% yoy, and Jan.-Sept. property sales of Rmb3,190bn, up 16%.

Our top Buys are Evergrande (3333.HK) and Vanke (A) (000002.SZ), both ofwhich are on our Regional Conviction list. We also have Buy ratings on PolyHK (0119.HK), Fantasia (1777.HK), Vanke (B) (200002.SZ), Poly (600048.SS),Gemdale (600383.SS), Agile (3383.HK), Powerlong (1238.HK) and ChinaResource Land (1109.HK). Our Sell ideas are Shenzhen Investment (0604HK)and IFM (CTC) both of which are on our Regional Conviction list. We also haveSell ratings on, Greentown (3900.HK), OCT (000069.SZ), Forte (2337.HK), andCWTC (600007.SS).Key downside risk: Government over-tightening thatinduces macro hard landing. Key upside risk: Better-than-expected propertysales.