By sorting out and summarizing the pre-sale capital supervision regulations of 33 key cities, this report quantitatively calculates the improvement space of the capital chain of listed real estate enterprises under different situations while analyzing the current supervision situation.
Free differentiation of pre-sale fund supervision system
The purpose of capital supervision is to complete the mission of guaranteed delivery building. The object of pre-sale funds supervision in most cities is commercial housing; The supervision scope of pre-sale funds includes all house purchase funds such as deposit, down payment, installment payment, one-time payment, commercial loan and housing provident fund loan; Pre sale funds are divided into general regulatory funds and key regulatory funds.
Regulatory standards and extraction rules vary greatly across regions. The regulatory caliber of pre-sale funds in sample cities can be divided into three categories: floating based on the project budget, a certain proportion of the total pre-sale funds, and calculated according to the construction and installation cost quota per unit area. In terms of fund withdrawal nodes and proportion, cities control the minimum retention proportion or maximum use proportion of key supervision funds according to the project progress.
Implement differentiated supervision on the credit rating of real estate enterprises. 11 of the 33 key cities explicitly allow “letter of guarantee substitution”, that is, a certain amount of supervision can be exempted from the letter of guarantee issued by the bank; 10 cities have set up credit linkage mechanisms, which can reduce the retention ratio of regulatory funds of some or all withdrawal nodes of high-quality credit enterprises.
The new regulation is expected to improve the flexibility of capital use. The national measures for the supervision and management of pre-sale funds of commercial housing have been issued recently, which defines the basic standards for the supervision of pre-sale funds. We believe that the new standard is close to the lower limit of the existing regulatory rules, which is expected to alleviate the problems of excessive regulatory base and proportion and unreasonable extraction rhythm.
Pre sale funds are an important fulcrum of interest free leverage
The financial supply side reform has significantly increased the dependence on pre-sale funds. As of 2021q3, the proportion of advance receipts of sample real estate enterprises in interest free liabilities reached 57.3%; The leverage of interest free liabilities reached 2.72 times. During the upward cycle of the industry from 2015 to 2018, the rapid expansion of advance receipts led to the upward rise of interest free leverage ratio; After 2018, the industry started the financial supply side reform, and the interest free leverage ratio remained stable as a whole and remained at an all-time high. The supervision of 30% pre-sale funds led to a decline of about 17% in operating leverage and about 11% in equity multiplier.
The regulatory marginal relaxation affects the geometric short-term debt end, the short-term debt ratio received in advance has increased significantly, and the short-term debt coverage rate of small real estate enterprises is close to 1. As of 2021q3, the overall pre collection short debt ratio of 69 sample real estate enterprises, namely “(pre Collection – accounts payable) / short debt”, is 1.15 times. The leading real estate enterprises have good sales and high coverage, and the actual short-term debt repayment pressure of small and medium-sized real estate enterprises is large. The sensitivity analysis results show that the deregulation of pre-sale funds has significantly improved the short debt ratio of advance collection. Although the improvement of small and medium-sized real estate enterprises is less than that of leading real estate enterprises, the adjusted short debt ratio of advance collection is gradually close to or even more than 100%, indicating that the deregulation of advance collection is expected to make up for the current very tight cash flow gap, that is, the key part of cash short debt ratio less than 100%.
At the interest bearing debt level, leading companies have more investment initiative. As of 2021q3, under the supervision proportion of 30% pre-sale funds, the overall “(advance collection – accounts payable) / interest bearing liabilities” of 69 sample real estate enterprises was 0.35 times; The overall coverage of interest bearing debt from advance receipts of real estate enterprises is not high. The sensitivity analysis results show that the relaxation of pre-sale funds can greatly improve the interest paying and debt paying ability of real estate enterprises, and the leading real estate enterprises will have more debt and investment initiative.
Grasp the beta of loose policy structure and the alpha of M & A. We believe that the marginal relaxation of this round of pre-sale regulatory policies will help alleviate the current liquidity crisis at the local level from top to bottom, make up for the short-term debt repayment gap of small and medium-sized real estate enterprises and avoid the spread of industry credit risk; At the same time, it will release more capital space for the head real estate enterprises and promote the benign recovery of industry investment and land acquisition expectations. In the future, we can expect the beta of loose policy structure and the alpha of M & A. Continuous recommendation: 1) high quality growth: Jinke Property Group Co.Ltd(000656) , Seazen Holdings Co.Ltd(601155) , Xuhui holdings, etc; 2) High quality leaders: Gemdale Corporation(600383) , Poly Developments And Holdings Group Co.Ltd(600048) , China Vanke Co.Ltd(000002) , Longhu group, China Merchants Shekou Industrial Zone Holdings Co.Ltd(001979) ; 3) High quality property management: Country Garden service, green city service, China Merchants Property Operation & Service Co.Ltd(001914) , poly property, Xuhui Yongsheng, etc
Risk warning: industry credit risk spread; Industry sales are down; Regulatory policies exceed expectations; Some estimates are based on certain assumptions, and there is a risk of subjective measurement deviation
