---
title: "Analysis Report: Morgan Stanley predicts that the rebound of China's Rongchuang may not be sustainable and reiterates the suggestion to buy into state-owned enterprises' domestic real estate at a low point."
description: "Morgan Stanley released an Analysis Report on the domestic real estate industry. Despite the past week's outperformance of domestic real estate stocks compared to state-owned enterprises, it is believ"
type: "news"
locale: "en"
url: "https://longbridge.com/en/news/97584167.md"
published_at: "2023-09-13T03:40:56.000Z"
---

# Analysis Report: Morgan Stanley predicts that the rebound of China's Rongchuang may not be sustainable and reiterates the suggestion to buy into state-owned enterprises' domestic real estate at a low point.

> Morgan Stanley released an Analysis Report on the domestic real estate industry. Despite the past week's outperformance of domestic real estate stocks compared to state-owned enterprises, it is believed that the main reason is the strong performance of Sunac China, a company in distress. However, the bank believes that this trend is not sustainable, as there is no fundamental improvement in the underlying fundamentals of the relevant companies. Sunac China is currently valued at a forecasted P/B ratio of 0.4 times, which is almost on par with the valuation level of state-owned domestic real estate stocks. The bank considers this situation to be unreasonable.

Morgan Stanley released an Analysis Report on the domestic real estate industry. Over the past week, domestic real estate stocks have continued to outperform state-owned enterprise indexes. The main reason is believed to be the strong performance of Sunac China (01918.HK), a company in distress. However, the bank believes that this trend is not sustainable, as the fundamental improvement of related companies is lacking. Sunac China is currently valued at a forecasted price-to-book ratio of 0.4 times, which is almost on par with the valuation level of state-owned enterprise real estate stocks. The bank considers this situation to be unreasonable. After a short-term rebound following loose policies, the bank expects the industry to fall back, as the sales data so far has not convinced investors of a significant recovery. However, the bank believes that in the next 1 to 2 months, with the improvement in sales volume and the expectation of further policy easing, there may be directional positive news in the short term for the industry. However, Morgan Stanley reiterated that if the sales data deteriorates after a partial recovery, the industry may weaken again. Morgan Stanley recommends buying state-owned enterprise real estate and property management stocks such as China Resources Land (01109.HK), China Overseas Land & Investment (00688.HK), China Resources Mixc Lifestyle Services (01209.HK), Poly Property Group (06049.HK), and China Overseas Property (02669.HK). (wl/a)

### Related Stocks

- [01918.HK - Sunac China](https://longbridge.com/en/quote/01918.HK.md)

## Related News & Research

| Title | Description | URL |
|-------|-------------|-----|
| Sino Biopharmaceutical says NMPA approved Benmelstobart injection for marketing | Sino Biopharmaceutical says NMPA approved Benmelstobart injection for marketing | [Link](https://longbridge.com/en/news/276024005.md) |
| Shenhua Energy Gets Securities Regulator's Nod for Share Placement Plan | Shenhua Energy Gets Securities Regulator's Nod for Share Placement Plan | [Link](https://longbridge.com/en/news/275851575.md) |
| Sino Biopharm Wins China Nod for New Lung Cancer Use of PD-L1 Drug | Sino Biopharmaceutical has received Chinese regulatory approval for its PD-L1 inhibitor, benmelstobart, for use as maint | [Link](https://longbridge.com/en/news/276016059.md) |
| FDB Raises HK$39.9 Million from Share Placement | FDB Raises HK$39.9 Million from Share Placement | [Link](https://longbridge.com/en/news/275610811.md) |
| Toyota sells more battery-electric cars in China than VW | Toyota has surpassed Volkswagen in battery-electric vehicle sales in China for the first time, selling 100,000 BEVs comp | [Link](https://longbridge.com/en/news/275756355.md) |

---

> **Disclaimer**: This article is for reference only and does not constitute any investment advice.