Mainland China/HK Property — Top 3 Questions This Week – Feedback on Golden Week / New Launches' Pricing in HK / Rally of Some Distressed Developers

J.P. Morgan's China/HK Property weekly note addresses the top 3 questions from investors this week. On Golden Week data, initial readings look encouraging but investors remain sceptical on sustainability, viewing the rebound as a knee-jerk reaction to the mortgage-subsidy policy; some hedge funds see short interest while long-only investors show more interest in CR Mixc and Wharf REIC, on which J.P. Morgan maintains Overweight. On Hong Kong residential launches, more new projects are now priced at a >10% discount to comparable secondary units, indicating developers are prioritising sell-through rates over maximising margins and turning less aggressive. On distressed developers, names such as Shimao rallied hard despite no company-specific news, which the team attributes to a rotation trade; absent any meaningful easing of liquidity stress, the rally is expected to be short-lived.