The Risk Of Hong Kong'S Real Estate Sector Has Been Overstated.

Yesterday afternoon, the government of the Hongkong Special Administrative Region auctioned a site on the top of Baja Road, which was eventually invested by HK $1 billion 820 million at HK $1 billion 820 million. The auction price is within the market expectations (expect the auction price to be about 1 billion 600 million to HK $2 billion 100 million before the market).

After the completion of the auction, Hongkong real estate stocks strengthened as a whole and led the Hang Seng Index to a 20000 point level. At the close, other Hongkong real estate stocks have rebounded in different places except for the new world development (00017.HK), which has a larger share in the mainland and in the mainland business. Among them, the real estate (00001.HK) edged up by 0.78%, the new territories (00016.HK) rose by 1.48%, the 00083.HK rose 0.92%, and the Hang Lung real estate (market, information, commentary) (00101.HK) rose 0.72%;

Because yesterday's land auction results were better than the previous one, and Hongkong's local property stocks showed signs of stabilizing after a rapid fall, all brokerages and big firms appeared to sing a lot of Hongkong real estate stocks. Among them, Goldman Sachs, Merrill Lynch, Merrill Lynch and so on believed that the stock price fell sharply in the short term, and its basic risk has been overreflected.

Bank of America Merrill Lynch believes that the recent downtrend shows that investors are overreacting to the fundamentals of Hongkong real estate stocks. The bank still regards Cheung Kong (market, information and Commentary) and Sun Hung Kai properties (quotes, information, reviews) as the preferred Hongkong real estate stocks.

The bank expects that in the coming months, second-hand housing prices in Hongkong will be sorted out, but there will be no sharp correction. On the contrary, the premium of second-hand housing prices will be narrowed from 30% to 40% to 20% more common.

Goldman Sachs believes that the current market may overreflect investors' worries about the risk of policy in the Hongkong real estate market.

Observing the policies recently introduced by the Hongkong government is aimed at rationalizing market behaviour rather than suppressing market activities.

These policies may delay the launch of new projects, but are expected to regain momentum in the coming months.

At present, the stock price of Hongkong real estate is 35% higher than that of Goldman Sachs for their 1 year net asset value, "many tightening risks have been reflected."

Goldman Sachs's preferred share of the board, including Hang Lung estate, Sun Hung Kai properties, Kerry construction (market, information, commentary) (00683.HK) and letter and home (market, information, commentary) (00083.HK), their ratings are all "buy in".

He said that the valuation of Hongkong real estate stocks is attractive.

From the perspective of stock price / book value, usually only when the real estate price continues to decline, the price of real estate will be lower than the book value (the average level of the stock price / book value is 1 times), but the real estate price will continue to decline. It is unlikely that the real estate price will continue to decline. From the discount of the share price to the net asset value, the discount rate has changed from the historical median at the beginning of April to the current level higher than the median level. At present, the average share price of Hongkong real estate shares has been reduced by 22.2% compared with the net asset value, and the average discount rate has been 14.9% since 1990.

He believes that the weakening of real estate stocks is due to the depressed market sentiment. This provides an opportunity for investors to invest for 6 months or even longer. The bank insists that it will be optimistic about Hongkong real estate stocks.

Fan Meiqi, an analyst at Huatai Hongkong, said that the market was worried that the local real estate market was going down under the influence of the policy of the SAR government. But history has proved that unless the economy is in recession, the government's regulation will not make the market go down sharply, because the government does not want the market to fluctuate.

Fan Meiqi said that the heavy stocks and the new territories had dropped more than 10% from their high level in April. Investors are advised to consider buying small notes and gaining a short-term rebound.