Market Review
Last week (1.17-1.23), the Shanghai Composite Index rose 0.04%, the Shanghai and Shenzhen 300 index rose 1.11%, and the real estate sector rose 2.22%. The real estate sector outperformed the Shanghai Composite Index by 2.18 percentage points and the Shanghai and Shenzhen 300 index by 1.11 percentage points.
Industry dynamics
On January 22, the Supreme People’s Court issued the opinions on supporting and ensuring the construction of Hengqin Guangdong Macao deep cooperation zone and the opinions on supporting and ensuring the comprehensive deepening of the reform and opening up of Qianhai Shenzhen Hong Kong modern service industry cooperation zone. In terms of the orientation of the judicial system and the response mechanism between Hong Kong and Macao, we have deepened the connection between the two sectors of the judicial system and the judicial development mechanism, and strengthened the connection of the judicial system and the response mechanism between Hong Kong and Macao.
On January 21, the Ministry of science and technology and the Ministry of housing and urban rural development signed a cooperation agreement to cooperate around the new urbanization and double carbon goals. Next, the two departments will further deepen cooperation in key areas such as urban and rural construction, green and low-carbon development, urban safety and resilience, and new urban infrastructure construction based on digitization, networking and intelligence.
On January 20, the central bank announced that it would cut the one-year loan market quotation rate (LPR) from 3.8% to 3.7%, the second consecutive month; Reduce the five-year LPR from 4.65% to 4.6%.
Industry news
On January 18, the director of the comprehensive Department of national economy of the national development and Reform Commission said at a press conference that infrastructure investment should be carried out appropriately in advance, 102 major projects in the 14th five year plan should be accelerated, and the special bonds issued by local governments in the fourth quarter of last year should be implemented into specific projects as soon as possible in accordance with the requirements of “funds follow projects”.
On January 18, the director of the financial market department of the people’s Bank of China said at a press conference that since the second half of 2021, the risks of individual real estate enterprises such as Evergrande have become explicit, and financial institutions have experienced short-term stress reactions. The financial management department has focused on the following work: first, adhere to the principles of legalization and marketization, and cooperate with the Guangdong provincial government, relevant departments and local governments to resolve the risks of enterprises in danger; Second, guide banking financial institutions to accurately grasp and implement the prudent management system of real estate finance, maintain the stable and orderly release of real estate credit, and meet the reasonable financing needs of the real estate market; Third, issue the notice to guide financial institutions to support risk resolution and industry clearing in a market-oriented manner.
Suggested concern
The meeting of the Political Bureau of the CPC Central Committee stressed the need to promote the construction of affordable housing, support the commercial housing market to better meet the reasonable housing needs of buyers, and promote the healthy development and virtuous cycle of the real estate industry. Three types of real estate stocks in the later stage deserve attention: (1) leading real estate enterprises with low interest rate financing costs and relying on state-owned enterprises to continuously obtain land in first and second tier cities, such as Vanke and Poly Real Estate; (2) Real estate enterprises that are less affected by the land policy and have strong land application ability, such as Seazen Holdings Co.Ltd(601155) , Baolong real estate, etc. (3) Leading real estate enterprises that have arranged long-term rental apartments, such as 5I5J Holding Group Co.Ltd(000560) , Longhu group, etc.
Risk tips
Tip 1: real estate regulation policy tightened
Tip 2: prevent financial systemic risks
