Core view
Event: according to media reports, the national measures for the supervision of pre-sale funds of commercial housing have been issued recently. It is clear that the supervision of pre-sale funds is “key amount supervision”. It is approved by the urban and rural construction department at the city and county level according to the project cost contract, which can ensure the amount of funds required for project design. When the funds in the account reach the supervision amount, The funds exceeding the quota can be withdrawn and used freely by real estate enterprises.
Face up to the grim situation and actively correct the deviation in the supervision of pre-sale funds. The pre-sale funds refer to the pre-purchase funds agreed by the buyer according to the pre-sale contract of commercial housing. At present, the pre-sale funds in most cities need to be withdrawn in strict accordance with the project image progress. This document makes it clear that local governments can verify according to the project cost contract, and can withdraw freely in excess of the amount in addition to the construction materials, equipment, construction funds and other related expenses required to ensure the completion of the project, On the one hand, we have clarified the bottom line of insurance delivery. On the other hand, we believe that making effective expectation guidance from the national level and unifying the way of capital supervision around the country will help alleviate the short-term capital pressure of real estate enterprises and avoid the downward trend of industry fundamentals from further evolving into the risk of the financial system.
The policy side continued to make efforts to alleviate the financial pressure of real estate enterprises as the main focus. Recently, many governments have successively issued loose policies to guide house purchase consumption from reducing the proportion of provident fund loans, relaxing pre-sale funds and encouraging house purchase. However, at present, the improvement of demand side policies is not enough to correct the current situation of the rapid decline of industry prosperity, and the policy effect is frequent. For real estate enterprises, the second quarter will enter the debt repayment peak of real estate enterprises. Due to the destruction of the existing circular chain of financing of real estate enterprises, the current policy focus is mainly on the support of M & A loans and the liberalization of bank credit lines. Recently, some local governments (Guangzhou, Chengdu, Yantai, Xiamen and other places) have adjusted the relevant policies of pre-sale supervision in order to relieve the liquidity pressure of real estate enterprises, Combined with the document that the loans related to the affordable rental housing project are not included in the concentration management of real estate loans, we believe that the effective implementation of policies in the short term will further reduce the credit exposure risk of real estate enterprises, and a series of subsequent loose policy tools will be added to achieve the goal of steady growth.
The decline of industry fundamentals has accelerated, and the M & A between real estate enterprises has made steady progress. In January, the sales area of new houses in the 55 cities we focused on monitoring decreased by 31% year-on-year. Among them, the growth rates of first tier, second tier and third and fourth tier cities were – 20%, – 24% and – 55% respectively. The downward trend of industry fundamentals continued. Recently, the central enterprises represented by CNOOC and China resources have successively completed the acquisition and merger of project assets of some real estate enterprises in danger. At present, the path of digesting risks through acquisition and merger has been clear. With the release of relevant acquisition and merger loan lines and the deepening of project negotiation among enterprises, it is expected that project M & A cases will gradually increase
The policy release is strengthened step by step, and the upward space of the sector can be expected. At present, the industry valuation has been repaired. At this stage, the rebound logic of the sector is still mainly based on the expectation of policy relaxation. Under the background of stable growth, we believe that the release of policies will be strengthened step by step. It does not rule out that non hot cities will break the structure of excessive regulation in the past. The subsequent industry fundamentals are expected to usher in recovery with the gradual improvement of policies. Continue to recommend China Vanke Co.Ltd(000002) Poly Real estate, Gemdale Corporation(600383) , China Merchants Shekou Industrial Zone Holdings Co.Ltd(001979) , China overseas development.
Risk tip: the re outbreak of the epidemic has an impact on economic expectations, the regulation policies of the real estate industry have been tightened beyond expectations, the gap between real estate sales and settlement has been lower than expectations, and house prices have fallen beyond expectations.
