May19-May25transactionvolumeandASP
Onawowbasis,20outof35citieswithdataavailablesawvolumesincrease,withagroupmedianof+3%fortheweekendedMay25(vs.-11%fortheweekendedMay18).Onayoybasis,27outof35citieswithdataavailablesawvolumesdecrease,withagroupmedianof-21%(vs.-28%).ComparedwiththeApril2014weeklyaverage,22of35citieswithdataavailablesawvolumesdecrease,withagroupmedianof-11%(vs.-15%),andwithagroupmedianof+1%forthefourweeksofMay(vs.-1%).Inrelativeterms,Tier2citiesunderperformedTier1/3citiesandtheYangtzeRiverDeltaRegionoutperformedamongtheotherregions.IntermsofASP,onawowbasis,7outof12citieswithdataavailablesawpricesincrease,withagroupmedianof+3%(vs.+2%).Ona3-monthcumulativebasis,9outof12citieswithdataavailablesawpricesdecreasewithagroupmedianof-2.1%comparedwiththeprior3-monthaverage.
YTDperformance
Asofend-May25,35citieswithdataavailablesawaverageweeklyvolumes1%/21%/15%lowerthantheApr2014/full-year2013/1H13averages.24of25citieswithdataavailablesawvolumesdecreaseytd,withagroupmedianof-25%yoy(vs.-23%fortheweekendedMay18).IntermsofASP,19outofthe26citieswithdataavailablesawpricesincreaseytd,withagroupmedianof+5%yoy(vs.+5%).
Inventorylevels
Totalinventoryforthe12citieswetrackincreasedby1.4%wowfortheweekendedMay25(vs.+1.0%fortheweekendedMay18).Basedonthe12-monthrollingGFAsold,averageinventorytake-uptimeincreasedto16.1months(vs.15.8months).Amongthe12cities:1)inventorywasstableinNanjing,Shenzhen,andDongguan;2)inventoryincreasedinBeijing,Xiamen,Qingdao,Shanghai,Suzhou,Ningbo,Guangzhou,HangzhouandFuzhou.
Investmentview
Buyideas:CG(onCL),Vanke-A(onCL),E-House,Greentown,CRL,Shimao,COGO,CMP-A,Poly-A,Longfor,Leju,Vanke-B.Sellideas:Gemdale,Yanlord,ShuiOnLand.Keyrisks:Substantialimprovement/deteriorationindevelopers’balancesheets;better/worsemacroconditions/policyloosening.