房地产行业：降准或令融资边际改善，但难有效提振需求.docxVIP

The People’s Bank of China (PBoC) announced a reserve requirement ratio (RRR) cut of 100bps last Friday, partially replacing its medium-term lending facility (MLF) and representing an estimated net liquidity of Rmb800bn. This is the fourth RRR cut since April 2018; however, no interest rate cut has been announced yet, while we see no sign of significant relaxation of China’s property tightening policies. As such, we expect to see limited stimulation in the property market, while home demand will remain under pressure in 2019, given the economic slowdown and weakening employment. We maintain our Equalweight rating on the real estate sector. New easing cycle. China conducted four rounds of RRR cuts in 2008-2018, including 200bps cuts in September-December 2008, 150bps cuts in December 2011-May 2012, 300bps cuts in February 2015-February 2016, and 350bps cuts in April 2018-January 2019. The previous three rounds were all accompanied with interest rate cuts (189bps, 50bps, and 125bps cuts, respectively), while China also lowered the down payment ratio and offered attractive mortgage rates to stimulate home demand. However, in this round of RRR cuts, no interest rate cut has been announced yet and our macro team sees limited likelihood for this to happen in 2019, while property regulation remains in place without substantial loosening. We thus expect to see limited improvement in fundamentals as this round of RRR cuts mainly aims to support micro-sized and private enterprises. Weakening demand. We forecast strong pressure on home demand in 2019 given the weakening economy, as GDP growth may slow down to a 10-year low in 1Q19, coupled with worsening employment. We note total incremental household loans reached Rmb6.3tn in 2016, Rmb7.1tn in 2017, and Rmb7.5bn in 2018E, with the proportion of total incremental Rmb loans surging from the historical average of 31% in 2008-2015 to 50%, 53%, and 45%, respectively. Looking forward, we see limited room for liquidity support of