A number of real estate enterprises collectively have a stable voice, and it is expected that the real estate industry is not in trouble

While the policy side frequently sends out the bottom support signal, the real estate enterprise side also begins to release a positive voice.

Recently, some real estate enterprises with relatively stable operation have begun to take the initiative to transmit positive information to the market with weak confidence and disclose their recent operation status. The content shows that the enterprise is in a benign operation state from sales collection, debt structure, financing and debt repayment arrangements, strategic response, etc.

Zhang Jiqiang, an analyst of Huatai Securities Co.Ltd(601688) fixed income, believes that the active disclosure of information by real estate enterprises has multiple positive effects. It can not only convey the information with relatively stable fundamentals of some enterprises, which is conducive to boosting investor confidence, but also help stabilize investor expectations and help restore the normal order of the real estate bond market.

strong fundamental toughness

On February 24, 10 real estate enterprises, including Poly Developments And Holdings Group Co.Ltd(600048) and country garden, successively issued announcements on the Shanghai Stock Exchange, actively disclosing their recent business conditions.

In terms of sales, although the sales speed slowed down due to the overall decline of the national market at the end of the third quarter, all real estate enterprises maintained a relatively stable performance.

Among them, Beijing Capital Development Co.Ltd(600376) 2021 has a more stable pace than previous years, and the sales performance in each quarter is relatively balanced. The annual contract amount is 114.9 billion yuan, an increase of 7% year-on-year; Huafa Industrial Co.Ltd.Zhuhai(600325) in 2021, the sales collection increased significantly, reaching 70 billion yuan, a year-on-year increase of more than 30%.

New Hope Liuhe Co.Ltd(000876) under the influence of the overall environment of the real estate market in the second half of last year, while increasing marketing efforts, the real estate has made greater efforts to collect money. It has always ensured the mortgage amount and tried to collect more money through various forms. Especially after October 2021, the stock mortgage has been basically solved, and the collection rate of more than 90% has been maintained. The operation situation is slightly higher than that of last year.

Gemdale Corporation(600383) and Poly Developments And Holdings Group Co.Ltd(600048) not only achieved performance growth in 2021, but also achieved a contract amount of 286.71 billion yuan and 534.929 billion yuan respectively, with a year-on-year increase of 18.15% and 6.38% respectively, but also significantly improved their ranking in the industry, rising 2 places and 1 place to No. 11 and No. 4 respectively.

In terms of debt, Gemdale Corporation(600383) , New Hope Liuhe Co.Ltd(000876) real estate, Huafa Industrial Co.Ltd.Zhuhai(600325) identified their identity as green housing enterprises in the announcement.

Among them, Huafa Industrial Co.Ltd.Zhuhai(600325) through a series of leverage reduction actions in 2021, the scale of interest bearing debt decreased by 10% year-on-year and short-term debt decreased by 40%, gradually completing the "three red lines" to green. New Hope Liuhe Co.Ltd(000876) real estate has remained green for four consecutive years. As of the end of January 2022, the balance of domestic corporate bonds and asset-backed securities is 6.195 billion yuan, and 1.524 billion yuan is due within one year. Its principal and interest on interest bearing liabilities are repaid on time.

In addition China Merchants Securities Co.Ltd(600999) according to the statistics of the 2021 mid-term report or the third quarterly report disclosed by the above real estate enterprises, most of them have maintained a relatively stable performance in terms of debt structure and short-term solvency. Among them, Longhu group and Beijing Capital Development Co.Ltd(600376) debts due within one year account for less than 15%, and there is little pressure on centralized repayment in the near future; The coverage ratio of debt due within one year of 10 real estate enterprises is higher than 1.2, and the short-term solvency is guaranteed. Among them, Longhu group, Xuhui, Poly Developments And Holdings Group Co.Ltd(600048) , the coverage ratio of debt due within one year is higher than 2.0, and the solvency is strong.

In addition to sales, financing, as another major source of liquidity for real estate enterprises, all real estate enterprises have also made progress in recent years. In addition to Poly Developments And Holdings Group Co.Ltd(600048) , Beijing Capital Development Co.Ltd(600376) and other state-owned central enterprises, New Hope Liuhe Co.Ltd(000876) real estate, Xuhui, Longhu and other private enterprises have also made breakthroughs.

It is disclosed that in December 2021, New Hope Liuhe Co.Ltd(000876) real estate was the first batch of private real estate enterprises that successfully obtained the approval of Shanghai Stock Exchange to issue supply chain ABS since the real estate regulation in the fourth quarter of 2021, and successfully issued 440 million yuan of one-year supply chain financial ABS products; Longhu also completed the issuance of 2.8 billion corporate bonds in January; Xuhui also made progress in the US dollar bond market and completed the issuance of an additional US $150 million of green priority notes on January 10, 2022.

In terms of debt repayment arrangements, Beijing Capital Development Co.Ltd(600376) , Poly Developments And Holdings Group Co.Ltd(600048) disclosed the follow-up bond issuance plan, and Xincheng and Xuhui disclosed the overseas debt repayment arrangements. Among them, Xuhui announced on January 19 that it had repurchased 20 million yuan of overseas RMB priority bills due in April this year, announced on January 24 that it had completed the redemption of priority bills due on January 23, 2022, and Xincheng group used its own funds to redeem bonds with a principal amount of US $160 million in advance on February 18, 2022.

It is worth mentioning that although it is not among the enterprises that actively disclose their operation and has been disturbed by a lot of market information recently, Rongxin released public information on the official wechat. After prepaying the US dollar debt due in February, it has remitted funds to the overseas repayment account on February 25 to repay the principal and interest of the senior notes due on March 1, 2022, The total is about US $287 million.

reduce market concerns

For this move of real estate enterprises, the industry generally holds a positive evaluation.

In fact, since October 2021, due to the disorderly default of individual real estate enterprises in the industry, investors have a lot of concerns about the solvency and willingness of real estate enterprises.

Due to the limited authoritative information disclosure channels of the real estate industry, the effectiveness of information disclosure of real estate enterprises needs to be improved, resulting in investor sentiment vulnerable to "gossip", and real estate bond investment falls into "agnosticism".

Therefore, in the current downturn of the industry boom, various public opinions in the real estate industry are intertwined, and the information is complex and asymmetric, which exacerbates the vicious circle of "negative public opinion → investors selling / buyers watching → valuation fluctuation / blocked financing sales → rating reduction → rising debt risk of real estate enterprises", which has undermined the normal investment and financing order of the real estate bond market.

Zhang Jiqiang believes that in this context, 10 real estate enterprises take the initiative to disclose their operation and financing and respond to market concerns, which will help reduce information asymmetry, help stabilize investor expectations, or alleviate the problems of cold primary financing and excessive fluctuation of secondary valuation in the current real estate bond market.

China International Capital Corporation Limited(601995) the fixed income team also believes that the current round of credit risk problems of real estate companies have also exposed their deficiencies in information disclosure, such as off balance sheet liabilities, liquidity of the parent company, etc. in addition, the temporary information disclosure of bond issuers other than regular disclosure is still less than that of listed companies, in the absence of official information disclosure, The negative rumors of "unable to prove or falsify" have a greater negative impact on bond prices.

"Nowadays, enterprises actively strengthen information disclosure and actively communicate with the market, which can reduce the market fluctuation amplifier effect caused by the fear of information asymmetry to a certain extent, and contribute to the healthy development of the industry and the bond market." CICC pointed out.

At present, the end of real estate policy has appeared. At the end of 2021, marginal relaxation is mainly concentrated in the financial system, from reducing reserve requirements and accelerating the release of stock mortgages to supporting reasonable financing needs and encouraging M & A financing.

Since 2022, the policy has gradually shifted to the demand side. After the central level made several statements, all localities have implemented policies to promote real estate support policies, including relaxing provident fund loans and relaxing settlement. Recently, some non restricted areas such as Heze and Chongqing have reduced the down payment ratio to further relax the leverage of house purchase. The industry believes that more demand side relaxation measures can be expected.

Demand side performance also recovered. According to the data of the National Bureau of statistics, in January 2022, among the 70 large and medium-sized cities, the sales price of new houses in first tier cities changed from - 0.1% to + 0.6% month on month, and the price of second-hand houses increased by 0.1% month on month, which was the same as that in December 2021.

Some insiders of real estate enterprises told first finance that since the second half of February, the overall market sales have warmed up month on month. According to a person from a South China real estate enterprise, a project in Shenzhen achieved 200 million sales over the weekend.

"House prices in first tier cities have shown signs of stabilizing, reflecting that the policy has achieved certain results, and buyers are expected to improve." Zhang Jiqiang pointed out that the real estate turning point in the first tier cities is expected to come first, and then spread to the second tier and second and third tier cities.

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