Dim Sum Express

A-Share Market

    Property: Inventory analysis; overall inventory still high, construction suspensions continue to rise

    Given that most newly built residential properties in China are sold before construction is fully completed, we have looked at residential inventories based on several more inclusive scopes of calculation. The supply shortage in first-tier cities is likely to remain in the long term given relatively low inventory levels. Short/mid-term inventories in second-tier cities have returned to relatively low levels following destocking over the past two years, with a minimal level of project suspensions. In contrast, third-tier cities continue to struggle with high property inventories, with a long period of time required for sold but undeveloped land parcels and suspended development projects to be depleted.

    Healthcare: Competition, policy and ownership succession driving transformation of medical instrument supply chain

    We estimate that the domestic medical instrument distribution market will ultimately be worth a total of Rmb427.8bn. Upcoming transformation of the medical instrument supply chain will be driven by intensifying competition which is pushing weaker players off the market, sector policies, and the succession of ownership and management at distribution companies which are mostly family businesses. We are positive on companies enforcing business integration, diversification and expansion amid upcoming supply chain transformation. Please see text for our stock picks.