Chinese property stocks ripe for picking as home sales improve and investors move past ChatGPT frenzy, Soochow Securities analyst says

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by Zhang Shidong at

  • Investors who have missed out on the ChatGPT trade can look to property stocks for their low valuations and improving fundamentals, Soochow Securities’ Chen Li says
  • A gauge of property stocks has fallen 2.1 per cent this year, versus a 6 per cent rise in the CSI 300 Index and a 60 per cent surge in ChatGPT-linked stocks

A veteran analyst called a buy on Chinese property stocks that have lagged this year amid a pickup in home sales, as investors eye fresh bets on policy tailwinds after missing out on the artificial intelligence (AI) trade.

With Beijing making economic revival a top priority and pledging support for the private economy, including softening its stance on tech platforms, more policy backing could be in the offing for real estate companies, according to Chen Li, chief economist at Soochow Securities in Shanghai. Property stocks are also attractive to traders who are not chasing the ChatGPT frenzy because of the low valuations and improving fundamentals, he said in a note on Sunday.

“Even in the absence of fresh policy support, a run-up on property stocks will last for more than a week, probably a quarter,” said Chen. “With policies in place, the rebound will carry on for longer.”

Chen has more than 20 years of experience as a stock analyst and strategist, with stints at Shenwan Hongyuan Group, Harvest Asset Management and UBS Group. He has previously made accurate predictions on the market’s movement during the boom and bust cycles.

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