[ET Net News Agency, 8 November 2018] HSBC Global Research cited data from the CRIC
indicating that October sales volume of 40 key cities in China declined 6% m-m. Sales
volume in the tier-1 cities dropped 38% m-m, among which Guangzhou recorded the largest
decline of 58%.
While sales volume in the tier-2 cities was largely flat, 18 tier-3 cities saw an
average 8% m-m decline in volume.
CRIC expects sales momentum to shrink further in the remaining months of this year,
which is in-line with HSBC's view.
The research house said, among the 16 stocks for whom it tracks monthly sales, 11 have
reported October contracted sales with a 9% m-m decline on average. Stocks that have
turned in stellar sales performances in 9M18 such as CIFI Holdings (00884) and Shimao
Property (00813) recorded more meaningful October sales declines of 30% and 26% m-m,
respectively, but are still on track to achieve their targets.
That said, some stocks are clearly tracking behind schedule and therefore stand a higher
chance of missing their full-year sales targets, including Agile Group (03383), Guangzhou
R&F (02777), Shenzhen Investment (00604) and China SCE Group (01966).
HSBC said its analysis of consensus earnings reveals that analysts have started to trim
forecasts. It still thinks it is too early to bottom fish. HSBC expects that sentiment
remains weak amid price cuts and a more remarkable slowdown in sales. (KL)