Chinese real estate stocks may retreat after short-term rebound sparked by policy easing – JPMorgan 

 

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Chinese property developers outperformed the Hang Seng China Enterprises Index over the past week, mainly driven by the rebound of the distressed developer Sunac China, JPMorgan said in a note.

However, the rebounding trend of Sunac China is likely to be unsustainable, due to the lack of improvement in the company’s fundamentals, it said.

JPMorgan believed that the real estate sector might recede following the short-term rebound sparked by the recent policy easing, as relevant property sales data so far was not convincing enough for investors to buy into the prospect of a notable revival.

The broker recommended buy on dips for state-owned developers and property managers such as China Resources Land, China Overseas Land and Investment, China Resources Mixc Lifestyle, Poly Property Services, and China Overseas Property.