中国房地产：拐点还是又一次虚假的开始？

China Property: An Inflection or Another FalseStart? Equity AnalystCara.Zhu@morganstanley.comCHINAPROPERTY Asia Pacific Industry View rebounded since March. We stay prudent and suggest waiting for more clarity, as the first-stagevaluation recovery has priced in continued sales growth. Morgan Stanley does and seeks to do business withcompanies covered in Morgan Stanley Research. As a result,investors should be aware that the firm may have a conflict ofinterest that could affect the objectivity of Morgan StanleyResearch. Investors should consider Morgan StanleyResearch as only a single factor in making their investmentdecision. For analyst certification and other important disclosuresrefer to the Disclosure Section, located at the end of thisreport. += Analysts employed by non-U.S. affiliates are not registeredwith FINRA, may not be associated persons of the memberand may not be subject to FINRA restrictions oncommunications with a subjectcompany,public appearancesand trading securities held by a research analyst account What has caused the unexpected secondarysales rebound? Observation 1: CNY-adjusted growth may suggest pend-up demand was released from4Q25 amid improved resident sentiment cumulativesecondaryhomesalesmaysuggestpend-updemandreleaseinthe25majorcities majorcities onCNY-adjusted basis Observation 2: Diverging performance between new and secondary home sales maysuggest market shift Housinglump-sumindexhasbeendroppingfasterthantransactionhomepricesy-ysince2025,indicatingincreasedshareofsmalllump-sum housing sumaccountedfor>8o%ofsecondaryhomesales in top-tier cities in April 2026 What Do We Expect on Sales Recovery? Drag 1. Limited improvement on household income and leverage limited improvement,despitehomesaleshavingcumulativelyshrunkby~4o% Employment PMl suggests non-manufacturingsectorsarestillunderpressure Home ownership ratio of China urban households reached ~80% in 2020, indicating that housing needs hasbeenlargelysatisfied Drag 1. Limited improvement on household income and leverage (con't) backto2014-15levels... Drag2.Rental ratesaredeclining sinceJuly2021,andstartedtore-weakenagain in April 2026 weaken amidfallingrental rates inrecentmonths,addingdownsidepressureonhomeprices owners are urgent willingtotakelosses,including13%whocouldacceptlossesof>20%,asofMarch2026 monthsinMarch2026 Drag4.Residentsarebearishonhomepricesandhavelimitedhomepurchaseplans weaklevelinourMarchAlphaWisesurvey buyingapropertyoranotherproperty,asofMarch2026 What Signposts Could Confirm a Real Inflection? Basedontheexperienceinthe2013-15recoverycycle,secondaryhomepricesturnedpositive m-m after the sales volume had trended up m-m for 3 consecutive months in Tier 1cities,and9monthsinTier2cities.Primaryhomepricesremainednegativem-m,but withanarrowingmagnitude,untilprimarysalesvolumehadimprovedfor10-11monthsConsideringthecurrentless-favorablemacro/demographics/housingmarkethealth,aswell asscar effect, we think it may take a longer period of sales volume improvement to support homepricesturning positive m-mthistime We think China is unlikely to repeat Hong Kong's recovery experience given the largedivergence indemographicsandhousing marketfundamentals The diverging trends in population and rental rates, and the notable gap in home ownership ratioslead usto believethat thefundamental housing needs inhigh-tier citiesinChinaare weakerthanthat in Hong Kong. Therefore, we think the Hong Kong recovery case might not be applicable tohigh-tier cities in China at this stage. What is Already Priced in? Current market caps imply4.5xP/Eon SOE developers'historical peakcoreprofit onaverage,whichis>2.5xhigherthanourestimated2028levels How to Position? MajordevelopershaveincreasedtheirfocusonTier1andtop-Tier2citiesforlandinvestment Disclosure SectionThe information and opinions in Morgan Stanley Research were prepared or are disseminated by Morgan Stanley Asia Limited (which acceptsthe responsibilityforits contents)and/or Morgan Stanley Asia (Singapore)Pte.(Registration number199206298Z) and/or Morgan Stanley Asia (Singapore) Securities Pte Ltd (Registration number 200008434H), regulated by the Monetary Authority of Singapore (whichaccepts legal responsibility forits contents and should be contacted with respect to any matters arisingfrom, or in connection with, Morgan Stanley Research), and/or Morgan Stanley Taiwan Limited and/or Morgan Stanley & Co International plc, Seoul Branch, and/or Morgan Stanley Australia Limited (A.B.N.67 OO3 734 576, holder of Australian financial serviceslicense No. 233742, which accepts responsibility for its contents), and/or Morgan Stanley WVealth Management Australia Pty Ltd (A.B.N. 19 OO9 145 555, holder of Australian financial services license No. 24O813, which accepts responsibility for its contents)INHOOOOO11O5); Stock Broker (SEBI Stock Broker Registration No. INZO0O244438), Merchant Banker (SEBI Registration No. INMOO0O1203), and depository participant with Na