Mainland China/Hong Kong Property: Mainland Leading Indicators Soft; Hong Kong Primary Sales Remain Strong
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JPMorgan monitors the latest data across Mainland China and Hong Kong property markets. Mainland leading indicators remain soft, with the Centaline first-tier city second-hand asking price index dipping to 19.6 and the manager confidence index declining to 56. Although 60-city primary sales registrations rose 24% week-over-week, this partly reflects a low base from the Qingming holiday, with year-to-date 20-city sales still down 14%. In contrast, Hong Kong's price index gained 0.9% week-over-week, bringing 1Q26 cumulative gains to 6%, just 4% shy of the full-year 10-15% forecast.
Hong Kong's primary market recorded approximately 330 transactions during the Easter long weekend, a decade-high. Centaline's valuation and salesperson indices remained elevated, signaling further price appreciation. Sector stocks gained 3%, outperforming the Hang Seng Index. JPMorgan's top Hong Kong picks include Sun Hung Kai Properties, Sino Land, Swire Properties, Hang Lung Properties, Jardine Matheson, and CK Hutchison Holdings.
In credit, the JACI China high-yield property index rose 0.8% week-over-week. Vanke's 2025 net loss widened to RMB 89 billion, with net gearing rising to 124%, though 4Q25 free cash flow turned positive to RMB 6 billion. Greentown China's net profit plunged 95%, but its balance sheet remains robust with approximately RMB 60 billion in cash.