Market Review
The week before the festival (1.24-1.30), the Shanghai Composite Index fell 4.57%, the Shanghai and Shenzhen 300 index fell 4.51%, and the real estate sector fell 4.20%. The real estate sector outperformed the Shanghai Composite Index by 0.37 percentage points and the Shanghai and Shenzhen 300 index by 0.31 percentage points.
Industry dynamics
On January 27, the State Council issued the “14th five year plan” for the modernization of market supervision (hereinafter referred to as the “plan”), which made a comprehensive plan for promoting the modernization of China’s market supervision. First, continuously optimize the business environment and fully stimulate the vitality of market players; Second, strengthen the comprehensive management of market order and create a fair competition market environment; Third, maintain and improve China’s unified market and promote the full and smooth circulation of the market; Fourth, improve the quality policy and technical system to serve high-quality development; Fifth, stick to the safety bottom line and strengthen the protection of consumers’ rights and interests; Sixth, build a modern market supervision system and comprehensively improve the efficiency of comprehensive market supervision.
On January 26, the Beijing Banking and insurance regulatory bureau held a 2022 working meeting. The meeting mentioned that we should adhere to the positioning of “real estate without speculation”, continue to improve the long-term mechanism of “stabilizing land prices, house prices and expectations”, and steadily resolve the risk of “grey rhinoceros” in real estate. We should severely crack down on illegal activities, continue to dismantle high-risk shadow banks, and effectively prevent the risk of major cases. We should resolutely prevent the disorderly expansion of capital in the financial field, strengthen financial antitrust and unfair competition, and resolutely ban illegal financial institutions.
Industry news
On January 28, shell disclosed the latest information about the internal review of the report of muddy water company. On December 16, 2021, muddy water company released a report that the estimated income data of shell housing in the second and third quarters were overstated by 77% – 96%, the total transaction volume of new houses (GTV) was overstated by 126%, and the transaction volume of stock houses was overstated by 33%. In addition, muddy water questioned that shell has a large number of “ghost stores” and “clone stores” registered as different branches, but actually in the same office location, At the same time, it is believed that the number of brokers is falsely increased when shells look for houses. Shell said that at present, the internal review of the report on muddy water shorting has been completed, and the relevant allegations have no factual basis.
On January 28, Shimao Group sold Shanghai Bund maoyue hotel to Shanghai real estate for RMB 4.5 billion.
Shimao is expected to realize the sale income of about RMB 3.01 billion, which is calculated with reference to the book value of the target company on December 31, 2021. The target company is a limited liability company established in China in 2002. Its main assets are “Shanghai Bund maoyue Hotel” located at No. 199 Huangpu Road, Bund, Hongkou District, Shanghai.
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
