Industry core view:
Under the macro background of “steady growth”, the fundamentals of the real estate industry continue to stay at the bottom, and the marginal improvement policy continues. It is expected that there are still many favorable policies to be expected in the follow-up, and continue to be optimistic about the market performance of the real estate sector. It is suggested to pay attention to (1) property management companies with good fundamental performance; (2) High quality real estate enterprises with financial stability and background of central enterprises / state-owned enterprises; (3) Enterprises with “good circulation” or “good circulation” of real estate development funds.
Key investment points:
Last week’s market review: last week, the real estate industry in Shenwan industry rose 4%, significantly outperforming the market. Since 2022, the real estate industry has increased by 2.66%, significantly outperforming the Shanghai and Shenzhen 300 index (down 6.86%), and the relative income is obvious.
Key policy highlights: (1) the people’s Bank of China and the China Banking and Insurance Regulatory Commission issued a notice on the exclusion of indemnificatory rental housing loans from the concentration management of real estate loans; (2) Several media reported that the opinions on the supervision of national commercial housing pre-sale funds have been issued. When the funds in the supervision account reach the supervision limit, the funds exceeding the limit can be withdrawn and used by real estate enterprises; (3) It is reported that with the promotion of relevant departments, large mainland asset management companies have begun to participate in supporting the restructuring of distressed real estate enterprises; (4) The central bank released the report on the implementation of China’s monetary policy in the fourth quarter of 2021 “Firmly adhere to the positioning that houses are used for living, not for speculation, do not use real estate as a short-term means to stimulate the economy, adhere to stabilizing land prices, house prices and expectations, implement the prudent management system of real estate finance, increase financial support for Housing leasing, safeguard the legitimate rights and interests of housing consumers, better meet the reasonable housing needs of buyers and promote the real estate market Healthy development and virtuous circle. ” (5) In terms of urban renewal and affordable housing, Guizhou Province, Chengdu, Suzhou and other places have successively announced plans to transform old courtyards and build affordable rental housing.
Industry fundamentals: the sales and land markets continued to decline, and the fundamentals continued to stay at the bottom. From February 1 to 6, the sales of commercial houses in 30 large and medium-sized cities fell 52% year-on-year, including 44% in the first line, 52% in the second line and 65% in the third line; Affected by the Spring Festival, the supply and construction of residential land in Baicheng decreased significantly, with a cumulative year-on-year decrease of 66.84% and a four week rolling decrease of 68.8% year-on-year; The transaction and construction area of residential land in Baicheng was 13000 square meters, with a cumulative year-on-year decrease of 73.66% since the beginning of the year, including a decrease of 98.34% in the first line, 80.59% in the second line and – 66.67% in the third line; The premium rate of residential land in Baicheng was 0%, down 2.3 percentage points month on month.
Trends of key companies: last week, key companies in Hong Kong stocks released monthly operating data in January, generally down 20% year-on-year. Among the A-share key companies, Yango Group Co.Ltd(000671) subject’s credit rating was lowered from AA to BBB, and some shares held by controlling shareholders and persons acting in concert were frozen by justice; Sichuan Languang Development Co.Ltd(600466) the total amount of principal and interest of debt due and unpaid is 29.855 billion yuan. In terms of financing, Vanke, China Jinmao and Greentown group issued medium notes, ultra short financing and corporate bonds.
Risk factors: the policy strength is less than expected, the industry fundamentals continue to decline rapidly, and the credit risk is higher than expected.
