By Jiahui Huang
Chinese property developer stocks had a rare day of outperformance in the Hong Kong market, posting sharp gains amid hopes that more policy support is on the way.
Property was one of the best-performing sectors in Hong Kong on Thursday, with the Hang Seng Mainland Properties Index up 3.9% in the afternoon session. The benchmark Hang Seng Index was 0.6% higher.
Leading the charge was Beijing-based Sino-Ocean Group, which surged 28%, on track for its best day since October 2024. Redsun Properties rose 20%, Sunac China was up 14% and Kaisa Group gained 17%.
Two of China's largest developers, China Vanke and Country Garden, advanced 5.3% and 5.1%, respectively. Logan Group rose 20%, further supported by news of a debt-restructuring plan approval.
The gains came amid market speculation that Chinese authorities could soon announce measures to aid the beleaguered property sector, analysts say.
Real-estate stocks got a boost from speculation about a possible meeting next week--potentially attended by Chinese leader Xi Jinping--that could focus on a new shantytown reconstruction program, Jefferies analyst Shujin Chen said.
Morningstar's Jeff Zhang also attributed the share gains to market chatter about the potential gathering, adding that nothing has been confirmed yet.
A new reconstruction program for shantytowns, aimed at helping low-income residents improve their living conditions, could brighten sentiment toward the property sector by helping developers digest a glut of excess inventory.
A buildup of unsold homes has been one of the factors weighing on Chinese developers during the yearslong property crisis that has dragged on despite repeated policy efforts to revive demand and investment.
The government rolled out a similar program in 2014 that was then expanded in 2016, Jefferies's Chen said. If there is a fresh effort, she doesn't expect a large-scale push this time around. An urban renewal program is more likely, she said.
Despite the sudden cheer, analysts remain cautious on the outlook for Chinese developers. The positive momentum is likely to be fleeting, and the structural issues plaguing the sector will need more heavyweight policy support, they say.
Write to Jiahui Huang at jiahui.huang@wsj.com
(END) Dow Jones Newswires
July 10, 2025 04:11 ET (08:11 GMT)
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