Country Garden Holdings' Sales Will Rebound As Homebuyers’ Sentiment and Site Visits Improve

In our view, the property market in China will see a mild rebound in sales growth in the next few years following the revival of site visits and improvement in homebuyers’ sentiment. That said, we expect housing demand to be contained by slowing economic growth and the government's restrictions on developers’ leverage and housing price inflation. As market downturn has largely subsided Country Garden Holdings, as one of the largest developers, will be better positioned than smaller peers due to its wider access to funding. CGH, supported by a healthy balance sheet with a net gearing ratio of around 40%, has reached the green category under China's "three red lines" policy in 2022, and we think the firm will further reduce its overseas debt exposure to alleviate liquidity pressure.