China aims to double the urban renovation in 2020 vs. 2019
We expect re-rating to continue
Given the sharp rally in the property sector we think the market is appreciating the sector's earnings sustainability and growth outlook, as we previously highlighted, in completion upcycle, public property, and third-party contract.
Urban renovation: A new market that may be worth Rmb100bn per annum
To boost consumption and improve living conditions, the State Council announced that it will renovate 39,000 aging urban residential communities in 2020, which will benefit 7m households, doubled from 19,000 communities and 3.5m households in 2019. This is a multi-year project, as the Ministry of Housing has identified 42m households that need to be renovated. Also, the government is promoting the introduction of professional management companies to manage the renovated facilities, as in the case of Beijing.