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Excluding real estate companies that recorded a net loss, the overall core earnings of Chinese real estate firms declined by 6% year over year in the first half of 2023, while that of property management companies logged an average growth of 6% year-on-year, JPMorgan said in a note, adding that the divergence between state-owned and private developers remained.
JPMorgan expected that property sales and supportive policy will become the main drivers of share prices for the rest of the year.
Benefiting from recent measures such as replacing mortgage records with homeownership for first-time mortgage qualification and lower down-payment ratios, mainland property shares will pick up in the near term as sales data in the coming weeks become stronger, it said.
In the short term, Longfor Group, Country Garden Services, and Seazen are some of the higher-beta private real estate firms that may outperform, it said. As for state-owned enterprises, China Overseas Land and Investment, and Poly Property Services may have more upside potential, it said.