Gao Shanwen: 15 Months Until Housing Inventory Cleared

iFeng: 高善文最新报告:再过15个月 楼市去库存会基本完成
To the current level of inventory, based on the historical reference to the reasonable rate of speed, it seems after about 15 months time, a large number of small cities to the inventory will be basically completed. The realization and confirmation of this transition marks the normalization of the economic operation, and will have a major impact on the large class of asset markets.

...It is noteworthy that, for much of 2014-2016 China experienced relatively deflationary deflation in the industrial sector, which means that de-leveraging in part actually started a vicious cycle of debt-deflation, which Making the lever to very difficult.

With the elimination of industrial deflation, corporate macroeconomic conditions to leverage the significant improvement in leverage will soon be significantly accelerated.

Some industry-level feedbacks suggest that the recent micro-base of capacity de-assetization and asset-liability ratio repair is based on the fact that a number of fast-growing competitive industries are completing the survival of the fittest and shifting to an oligopolistic, more mature and competitive landscape. If this judgment can be confirmed, it will mean that the recent deflationary recession and corporate earnings recovery is across the cycle, and will form a more long-term support for the capital market.

...As a result, asset turnover in China's corporate sector is likely to bottom out, supporting both the improvement in corporate macro leverage and the return on assets to support the stock market.

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