Healthy fundamentals will remain. Despite policy tightening, commodity housing sales should be maintained at strong levels in absolute terms due to urbanization, housing replacement demand, monetization of squatter settlement rebuilding and the recovery of the global economy. In 2017, we estimate that the YoY growth range of commodity house sales and GFA YoY growth range should be between 0%-5% and -5%-0%, respectively, and estimate GFA newly started and investment to record around an 8.0% YoY increase and 7.0% YoY increase, respectively.

Policy and Monetary Environment........3

Sector Fundamentals and Characteristics.....7

Valuation......14

Investment Rating and Top Pick ........17

Company Report: China Overseas (00688 HK).................19

Company Report: China Resources Land (01109 HK) ......21

Company Report: Country Garden (02007 HK)......25

Company Report: Evergrande (03333 HK)..............27

Company Report: Shenzhen Invest (00604 HK) ....29

Company Report: Modern Land (01107 HK).........33

Company Report: Sh Ind Urban (00563 HK).......37