In previous real estate cycles, the stock market has consistently acted as a leading indicator. Current housing prices in China's tier-one cities are now showing encouraging signs of stabilization. Since the end of March 2026, share prices of the covered property developers have risen by an average of 6%.

Among them, the stronger-performing state-owned developers have seen an average increase of 17%, while the share prices of CHINA OVERSEAS and CHINA RES LAND have surged by approximately 30%.

**CHINA OVERSEAS (HKEX: 00688)**

An optimistic scenario analysis indicates that by 2028, the cash earnings of these two companies are projected to increase by over 30% and 50% respectively compared to 2026 levels.

**CHINA RES LAND (HKEX: 01109)**

This rebound suggests the market may have begun pricing in a broader recovery than the baseline scenario, with Shanghai and Shenzhen potentially leading the current inflection point. To test whether current valuations are reasonable under more optimistic market expectations, a "four-pillar recovery framework" was applied, analyzing demographics, income, affordability, and supply in first and second-tier cities.

Beyond Shanghai and Shenzhen, 15 cities were selected to form a "leading cities" cohort. The analysis shows that if a price inflection occurs in these 15 cities, matching the projected 15% increase by end-2028 for Shanghai and Shenzhen in the optimistic scenario, and using the better-performing CHINA OVERSEAS and CHINA RES LAND from this rebound as examples, the implications are significant.

CHINA OVERSEAS, with its primary focus on property development and over 80% exposure to salable resources in leading cities, would be the biggest beneficiary of contract sales growth. CHINA RES LAND, in addition to benefiting from a property development recovery, could also see improved mall performance and rental income driven by wealth effects from rising property prices.