Core view
Market review this week. In the 7th week, the real estate sector index was weaker than the CSI 300 index and the gem index. The relative return of the real estate sector compared with the CSI 300 index was – 1.8%. The CSI 300 index closed at 4651.24, with a weekly increase of + 1.1%; The gem index closed at 2826.81, with a weekly increase of + 2.9%; The real estate sector index closed at 3436.03, with a weekly increase of – 0.7%.
Industry highlights this week. The Shanghai headquarters of the central bank said that RMB loans increased by 19.8 billion yuan and household loans increased by 20.9 billion yuan in January. The CBRC issued risk tips to guard against malicious speculation of yuancosmic real estate. The down payment ratio of “no house, no loan” in Heze, Shandong Province was reduced to 20%. Beijing will receive 48 billion yuan in the first round of centralized land supply in 2022. Wang Jun, vice chairman of China Construction Industry Group, said that the structural adjustment is to improve efficiency, and the company’s business direction has not changed.
Sales of new houses this week increased compared with last week, and sales of second-hand houses increased compared with last week. In the seventh week, the sales of new houses in 29 major cities was 24000, an increase of 24.7% over the fifth to sixth weeks; In 11 major cities, 6000 sets of second-hand houses were sold, an increase of 38.1% over the first 5-6 weeks; Compared with the first 5-6 weeks, the growth rates of new housing and second-hand housing transactions in first tier cities were 31.3% and 26.8% respectively; The growth rates of new housing and second-hand housing transactions in second tier cities were 23.1% and 14.6% respectively compared with the first 5-6 weeks. Inventory decreased compared with last week, and inventory sales increased compared with last week. As of the 7th week, the inventory of 15 major cities was 1.224 million units, a decrease of 7000 units compared with the 5th-6th week; The stock to sales ratio was 14.1 months, an increase of 0.4 months compared with weeks 5-6. The land market transfer heat this week is lower than last week. In week 7, a total of 7 pieces of land were sold in 26 major cities. The amount of land transfer increased. In the 7th week, the land transfer fee of 26 major cities was 4.46 billion yuan, an increase of 2.3 billion yuan compared with the 5th-6th week. The average premium rate decreased. In the seventh week, the average premium rate of land transactions in 26 major cities was 0.1%, 17.3 percentage points lower than that in the fifth to sixth weeks. In week 7, the number of land auction in 26 big cities was 0.
Announcement of key companies. China Vanke Co.Ltd(000002) completed the issuance of 3 billion yuan of medium-term notes. Gemdale Corporation(600383) announce 2021 results. Shenzhen Overseas Chinese Town Co.Ltd(000069) , Yango Group Co.Ltd(000671) announced the results in January 2022. Yango Group Co.Ltd(000671) failed to pay the required interest on overseas bonds within the exemption period, totaling US $27.263 million. China Fortune Land Development Co.Ltd(600340) the controlling shareholder reduces the shares of the company.
Investment proposal and investment object
After the rise of A-share real estate stocks since the new year of 2022, while the uncertainty in the overseas market has increased significantly, investors hope to see more real estate support policies from top to bottom. Since the beginning of the year, the sales position has always been consolidated, and the current industry fundamentals are still inertial downward. This week, the down payment ratio was adjusted more and more, and the policy expectation was gradually fulfilled. From the first centralized auction in Beijing, the expected profit margin of sales has rebounded significantly, but the willingness of private enterprises to participate in the auction is still insufficient. We believe that low and medium rated real estate enterprises are still in the dilemma of debt crisis, and the existing policies can not improve their credit status. The M & A of high rated real estate enterprises may play a role in relief, and the policies are still expected to be more relaxed. Under this combination of fundamentals and policies, we focus on the valuation repair of real estate enterprises with financial security in the short term. We are optimistic about the first-line leaders with stable performance, and recommend Poly Real Estate (600048, buy), China Vanke Co.Ltd(000002) (00000 2, buy); Second tier leaders with flexible performance are recommended Gemdale Corporation(600383) (600383, buy) and Longhu group (00960, buy). At the same time, we are optimistic about the property management and business management industries with rapid growth and strong consumption attributes. We recommend Country Garden Service (06098, buy), poly property (06049, buy), China Merchants Property Operation & Service Co.Ltd(001914) (001914, increase in shareholding), New Dazheng Property Group Co.Ltd(002968) (002968, buy), rongchuang service (01516, buy), Xingsheng business (06668, buy).
Risk tips
Sales were significantly lower than expected. The counter cyclical policy was less than expected. Interest rates have risen significantly.
