China Developers Extend Surge as Analysts See Sales ReboundKana Nishizawa
China Resources Land Ltd. and China Vanke Co. jumped for a second day in Hong Kong, with analysts saying shares of mainland developers may gain as much as 20 percent this year as sales rebound.
Government stimulus will help China’s property market recover, boosting stocks, according to CIMB Securities Ltd. and UOB-Kay Hian (Hong Kong) Ltd. China Resources Land jumped 4.8 percent today at the close in Hong Kong, capping a two-day surge of 12 percent. China Vanke, the nation’s biggest listed developer by sales, advanced 3.3 percent today.
“Sales should see a strong recovery in 2015,” said Johnson Hu, an analyst at CIMB in Hong Kong. “We think there will be more supportive policies including another interest rate cut and a mortgage rate reduction.”
China Resources Land, China Vanke and Guangzhou R&F Properties Co. rallied at least 24 percent since the central bank unexpectedly trimmed its benchmark interest rate on Nov. 21, fueling speculation the government will take more steps to support the economy. Chinese property shares jumped on Jan. 2 after Beijing said it would raise the cap on housing-fund loans for first-time buyers.
New-home prices fell in fewer Chinese cities in November after the government eased property curbs and cut interest rates. Prices dropped in 67 cities of the 70 tracked by the government from the month before, the National Bureau of Statistics said last month. Prices fell in 69 cities in October.
“The fundamentals look very solid in first three months, due to weak base last year,” Edison Bian, head of China property at UOB Kay-Hian, said in an e-mail. Share gains in the industry will be led by mid-sized companies with strong growth momentum, he said.
Shares of Chinese developers listed in Hong Kong may gain 15 percent to 20 percent in 2015, according to both Bian and CIMB’s Hu.