Key Takeaways:
Chinese property stocks may outperform in the short term after a 36 percent year-over-year jump in April secondary home sales, according to a new JPMorgan research report.
The report noted the rally was driven by data from the Iceberg Index showing robust transaction volumes in major mainland cities ahead of a key Political Bureau meeting.
Despite the surge in secondary transactions, the bank pointed out that other leading indicators, such as selling prices and developer sales, remain weak. JPMorgan's top picks are China Resources Land (01109.HK) and China Resources Mixc Lifestyle (01209.HK). It identified state-owned developers like China Overseas Land & Investment (00688.HK) as having higher beta.
The report suggests the sector's recent 4 percent rebound may continue if Beijing introduces new policy support, though it cautioned that a true market bottom is not expected until 2027. Strong secondary transaction volumes are expected to directly benefit platforms like KE Holdings (02423.HK).
The divergence between strong secondary sales and weak developer data highlights continued uncertainty in the sector. Investors will be closely watching for signals from the late-April Political Bureau meeting for any concrete policy stimulus that could sustain the rally.
This article is for informational purposes only and does not constitute investment advice.
