Industry: the prosperity continues to be low, and the demand side is relaxed as scheduled
On the sales side, the residential sales area of 300 cities in January was – 30% month on month and – 44% year-on-year in a single month. The sales boom continued to be depressed. On the land side, in January, the cumulative number of residential land transactions in 300 cities in a single month was – 61% year-on-year, a decrease of 36 percentage points compared with the previous period, and the land transaction premium rate was 4.2%, which remained at a low level. On the financing side, in January, real estate enterprises issued 32.5 billion yuan of Chinese bonds, a month on month ratio of – 23%, a year-on-year ratio of – 60%, and issued 14.9 billion yuan of overseas bonds, a month on month ratio of + 487%, a year-on-year ratio of – 83%. The total debt financing was 47.4 billion yuan, a month on month ratio of + 6%, a year-on-year ratio of – 72%. On the policy side, since 2022, the warm wind on the policy side has been blowing frequently, and the demand side has been relaxed as scheduled. Some banks in non restricted areas such as Heze, Chongqing, Ganzhou and Foshan have successively reduced the down payment ratio of the first house to 20%. Beihai, Zigong, Qingdao, Ningbo, Jinan, Ma’anshan, Jilin and Nanning have introduced loose housing loan and provident fund policies Supporting policies such as housing subsidies.
Company: head sales continued to weaken, and the performance of the sector was under serious pressure
In January 2022, the cumulative sales of top 3, top 5, top 10, top 20 and top 30 real estate enterprises were 111.3 billion yuan, 154.6 billion yuan, 223.3 billion yuan, 319.4 billion yuan and 395.9 billion yuan respectively, with a year-on-year decrease of 40.2%, 41.2%, 41.9%, 41.3% and 39.9% respectively. The sales of head real estate enterprises continued to weaken. As of February 24, according to the 70 companies that have issued performance express or performance forecast, 19 companies have pre increased, reversed losses and slightly increased their performance, accounting for only 27%. The performance of the sector is under serious pressure.
Sector: the valuation is still at the lowest level in history
Since the release of the last strategy report, the real estate sector has fallen by 1.8%, outperforming the Shanghai and Shenzhen 300 index by 1.8 percentage points and ranking 21st among 31 industries. According to the consensus expectation of wind, according to the latest closing date, the dynamic PE of the sector in 2022 is 5.7 times, 7.0% lower than the bottom valuation level (6.1 times dynamic PE) on January 3, 2019, which is still at the lowest level in history.
Investment suggestion: the demand side is relaxed as scheduled, and the dawn is near
At present, the warm wind on the policy side is blowing frequently and the demand side is relaxed as scheduled. Although there are still some problems in the industry to be solved, they have basically been reflected in the valuation. We believe that it will take some time for the industry fundamentals to stabilize and improve, and there is still much room for follow-up policy game. In the medium and short term, with the greater relaxation of policies in non restricted areas, the second tier leading real estate enterprises with more third and fourth tier cities will benefit more; In the medium and long term, with the withdrawal of the fast turnover mode from the historical stage and the repair of the long-term balance sheet of real estate enterprises, the leading real estate enterprises with stable operation and outstanding comprehensive strength will continue to benefit; In addition, Wuguan leading companies are expected to benefit from the lifting of real estate repression in the future, and the valuation is expected to be repaired. In March, China Merchants Property Operation & Service Co.Ltd(001914) , Seazen Holdings Co.Ltd(601155) is recommended.
Risk tips
The downward trend of fundamentals exceeded market expectations, and the policy could not be warmed up for a long time.
