Changes in Hong Kong stocks | Domestic housing stocks have the highest decline. The full implementation of the new real estate policy will tighten or further concentrate developers' liquidity market share

The Zhitong Finance App learned that domestic housing stocks had the highest decline. As of press release, C&D International Group (01908) fell 5.65% to HK$12.19; Greentown China (03900) fell 2.64% to HK$6.095; and Sunac China (01918) fell 2.48% to HK$0.59.

According to news, on August 28, various departments such as the Ministry of Housing and Construction, the Central Bank, and the General Administration of Financial Supervision intensively introduced new real estate policies. CITIC Construction Investment pointed out that raising the threshold for sales and pre-sale of existing homes will lead to a phased contraction in the supply of new homes that can be sold, and housing companies' capital will be put under pressure in stages. The analysis points out that the asset turnover ratio and internal rate of return (IRR) may drop to a quarter of the original under the new deal, and the market is concerned about the short-term profitability of housing enterprises.

CMB International believes that full implementation of the policy will tighten developers' liquidity, extend the capital recovery cycle from 3 to 6 months to 6 to 12 months, accelerate the exit of small developers with insufficient capital from the market, and further concentrate market share on state-owned enterprises; on the demand side, it will reduce the risk of unfinished and delayed delivery, and help boost buyers' confidence. The bank believes that this reform is a key measure to “exchange short-term pain for the long-term health of the industry”, showing the position of regulators to take the initiative to break the vicious cycle of the industry.