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Wind data shows EVERGRANDE's trend from 2010-2025. Over the past 5 years, investors who bought leading real estate stocks probably don't even want to cry anymore, having experienced a solid 60-month decline. If you bought the hottest billion-yuan annual sales real estate giants at their 2020 peak and held firm until now, you'd be directly facing the tragic word "delisting" with total losses and empty hands!
Looking at human economic history, such stories of extreme joy followed by immense sorrow keep repeating. For example, Japan's real estate bubble in 1990 saw property prices plunge for 10 years, dropping 70%, while heavy mortgage burdens plunged Japan's middle class into the "Lost 30 Years." Similarly, the 2008 US subprime mortgage crisis nearly threw the entire world into a great depression in less than a year, spawning the far-reaching "Occupy Wall Street" movement.
(Data source: Wind)
Today we briefly review this collapse moment to see what lessons it brings us, and what opportunities it might present:
Just before EVERGRANDE's delisting, Beijing announced administrative relaxation: canceling purchase restrictions outside the Fifth Ring Road, with Hangzhou and Shenzhen following suit. Most of Beijing's new developments in the past 5 years have been outside the Fifth Ring Road. Fourth-generation new homes achieve over 100% space efficiency (Data source: Wind), with balconies and double-height spaces becoming standard. Policy has shifted from "controlling housing prices" to "reducing inventory." These rebuilders from the ruins tell us who is taking over the new era:
Dimension | Old Order (EVERGRANDEs) | New Forces (Survivors) Financing Logic | High leverage, borrowing new to repay old | Cash flow is king (state capital backing + REITs exit) Product Core | Standardized replication "concrete boxes" | Right to define good housing (balcony revolution + smart communities) Land Narrative | Land hoarding for value appreciation arbitrage | Stock renovation (urban villages + dual-use facilities for emergency and normal times)
Image source: Author's compilation; Reference materials: Wind
Back to the initial example: Japan's real estate bubble burst continues to this day, but the collapse of the old era cannot bury one of humanity's four rigid needs: housing among clothing, food, housing, and transportation. When the old model sinks, new housing demands can still nurture 10x varieties. EVERGRANDE's delisting erects the final tombstone for real estate's golden age. The tombstone bears lessons, while the signpost points toward dawn.
【Investor Q&A Section】
【Question 1】Teacher Liu, is this currently a bull or bear market?
【Answer】Bull and bear markets before 2019 had very clear markers, such as 2007, 2009, and 2015. In those bull market cycles, as long as you held on, both quality and junk stocks would gain substantial returns within six months to a year of bull markets. So investors always expect such simple and brutal bull markets. However, after 2019, market structure and participating capital composition underwent dramatic changes, making bull and bear market indicators less obvious. For example, 2019-2021 saw sector rotation stocks leading, but 2021-2024 saw dividend stocks leading, and 2025 to date has seen dividend + growth stocks. This represents what used to be completed in one year of bull market sectors and gains now being randomly dispersed across 5-6 years by economic cycles. This is definitely a slow bull. Of course, if methods are inappropriate and you always want to chase trends, you might very well turn your account into a slow bear. So every retail investor facing this increasingly difficult market must either arm themselves or join the regular army.
【Question 2】Old Liu, can anti-involution succeed compared to the 2016 supply-side reform?
【Answer】The supply-side reform starting in 2016 mostly involved upstream sectors like coal, minerals, and oil. Current anti-involution is gradually expanding to mid and downstream sectors, making the difficulty exponentially harder. For example, Shanxi coal and Xinjiang coal have no difference - the state just needs to control capacity. But now anti-involution touches mid and downstream sectors with significant differences. For cars, BYD and Geely have many dimensional differences in brand, technology, etc., not solvable with one-size-fits-all approaches. Another example is how to absorb unstable factors like personnel layoffs after capacity reduction. Compared to 2016's supply-side success, at least two factors are needed: First, providing an asset pool for wealth appreciation (2016's shantytown renovation). Second, having a major industry that can absorb employment (2016's internet consumption). So for this anti-involution effort, if we can find benchmarks for these two dimensions, we might see actual reform results.
【Question 3】Teacher Liu, how do you view the current year-on-year surge in short-term financing for the automotive industry?
【Answer】In July, the state unified the tone of "anti-involution," with wind and solar power including cement, coal, and steel industries all taking action. Since the automotive industry has had accounts payable occupation behavior in recent years, this increase in short-term financing is the specific data manifestation of replacing previous payables in response to anti-involution. This is favorable for automotive companies that previously used payables for real investment, while "smart" automotive companies that played arbitrage games with occupied funds will pay corresponding costs.
【Question 4】Teacher Liu, how do you view current pharmaceuticals?
【Answer】Pharmaceuticals, solar, wind power, military, chips, new energy are all technology-attribute sectors with currently low valuations, needing catalysts. Innovative drugs have started due to BD deals, wind power's latest bidding prices have increased and are also starting.
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