According to the Huatai Securities Research Report, on August 18, the Premier of the State Council signed the State Council Order to officially announce the “Decision of the State Council on Amending the 'Housing Provident Fund Administration Regulations'”. In addition to the four major revisions to broaden use, improve efficiency, strengthen risk control, and expand coverage, we believe that we also need to pay attention to changes in the mechanism for forming interest rates on the Provident Fund, or the possibility that they may lead to a structural reduction in the interest rate of the Provident Fund. Low-cost second-hand housing in Shanghai has been the first to stabilize since this year, confirming the role of the Provident Fund policy. If the Provident Fund usheres in structural interest rate cuts in the future, and housing rents in core cities gradually stabilize or even rebound, it may spawn more “rent-to-buy” demand and help the real estate market to stabilize at an accelerated pace. The focus is on high-quality housing enterprises with many layouts and product advantages in core cities, as well as some undervalued housing enterprises, leading Hong Kong-funded housing enterprises, and property management/commercial management companies.

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