CLSA issued a research report stating that property agencies and state-owned developers will be the primary beneficiaries of the property market recovery, leading the firm to raise its target prices for CHINA RES LAND (01109), CHINA JINMAO (00817), and YUEXIU PROPERTY (00123). The target price for CHINA RES LAND was increased from HK$34.1 to HK$42.4, with a "Buy" rating. The target price for CHINA JINMAO was raised from HK$1.52 to HK$2.43, also with a "Buy" rating. The target price for YUEXIU PROPERTY was lifted from HK$5.1 to HK$5.5, maintaining a "Buy" rating. CLSA's top pick remains CHINA RES LAND.

Channel checks indicate that the recovery in Shanghai's property market has entered a phase of demand moving upmarket, with improvements in both primary and secondary market transaction volumes increasingly driven by mid-priced units rather than smaller units. Supported by improved affordability, stable inventory, and a lower opportunity cost of capital, the firm believes the probability of the cycle reaching a bottom has increased.

Transaction improvements in Shanghai's primary and secondary markets show reduced reliance on low-priced units. According to CRIC data, units priced below RMB 2 million accounted for 36% of Shanghai's secondary market transactions in April, down from 50% in March. CLSA's channel checks also show that the share of immediate transactions for units below RMB 3 million decreased to 56% in April from 72% in February and 62% in March. Secondary market prices also rose by 0.4% month-on-month in May.