Event: the central economic work conference was held in Beijing from December 8 to 10. The conference pointed out that we should adhere to the positioning that houses are used for living rather than speculation, strengthen expectation guidance, explore new development models, adhere to the simultaneous development of rent and purchase, accelerate the development of long-term rental housing market, promote the construction of indemnificatory housing, and support the commercial housing market to better meet the reasonable housing needs of buyers, Implement policies to promote the virtuous circle and healthy development of the real estate industry.
Under the premise of “housing without speculation”, strengthen the expected guidance. In this economic work conference, we still regard “housing, housing and speculation” as the basic positioning of the industry, continue the main tone of the policy since 2016, and put forward “strengthening expectation guidance”. We believe that under the background of the continuous decline of the current market, effective management of market expectation means the need to avoid systemic risks caused by the decline of the market, Therefore, further policy support is needed for the release at the demand level. Combined with the new “focus on meeting the demand for improved housing mortgage” in the previous statement of the cbcirc, we believe that it is necessary to make appropriate adjustment to the demand side regulation policies of some cities, and the policy improvement is expected to spread from point to area in the next quarter, The signal from the recent high-level meeting has been significantly more positive.
“Exploring a new development model”, the industry vision is facing reconstruction. In this meeting, “exploring new development models” was proposed for the first time. Although the formulation is relatively new, it can be found that the transformation of industry development models has actually run through the policy documents in recent years. First of all, the simultaneous development of rent and purchase and the construction of long-term rental housing and affordable housing will be the key direction of policy in the future. The profit model of earning land dividends and rising house prices in the past is unsustainable; In addition, the exploration in the fields of property management and transformation of old communities is also the direction that real estate enterprises need to focus on in order to achieve sustainable development in the future, so as to avoid the continuous spread of thunderstorms caused by high leverage of a large number of real estate enterprises since this year, and promote the virtuous circle and healthy development of the whole industry through the “new development model”.
When credit support turns to loose, the normal financing needs of real estate enterprises will be met. Earlier, the Politburo meeting stressed “supporting the commercial housing market to better meet the reasonable housing needs of buyers”. This expression was put forward for the first time since 2015. The intention of policy underpinning has been very obvious. At the same time, the recent reduction of reserve requirement means that banks can release more credit funds, and the liquidity at the supply and demand ends is expected to be supplemented. According to the statistics of Shell Research Institute, the credit cycle of second-hand housing banks in key cities has been shortened by 5 days in November; The CSRC stated that it would support the reasonable and normal financing needs of real estate enterprises. Recently, poly, Jindi, China Merchants Shekou Industrial Zone Holdings Co.Ltd(001979) , CNOOC, country garden, Longhu and other enterprises took the lead in obtaining financing support. Various financing channels at home and abroad are gradually returning to normal, which is conducive to the relief of the financing pressure of real estate enterprises in the short term.
The bottom of the fundamentals remains to be confirmed, and the positive signal of the policy is obvious. At present, the wait-and-see sentiment in the housing market and the land market is dominant, and the superimposed real estate tax pilot expectation further aggravates the negative feedback effect. Therefore, it is feasible and necessary to resolve the further spread of risks through policy easing. The recent political bureau meeting and the central economic work conference tend to be friendly towards real estate, and the follow-up relevant measures at the implementation level are expected to be effectively followed up within one quarter. For high-quality real estate enterprises, they have taken the lead in benefiting from the financing level recently. At the same time, the accelerated liquidation within the industry means the emergence of opportunities to improve the concentration. In the future, the structure of real estate enterprises will also face a differentiation pattern. At present, there is still poor market expectation for the bottom rebound of profit margin. We suggest paying attention to real estate enterprises with relatively stable finance from the perspective of capital cost and leverage, Continue to recommend China Vanke Co.Ltd(000002) , Poly Developments And Holdings Group Co.Ltd(600048) , Gemdale Corporation(600383) , China Merchants Shekou Industrial Zone Holdings Co.Ltd(001979) , China overseas development.
Risk tip: the epidemic situation is escalating again, which has an impact on the real estate sales end. The pilot strength of real estate tax is higher than expected, the house price is lower than expected, the regulation policy is continuously high-pressure, the improvement of financing environment is lower than expected, and the liquidity risk of the industry is intensified.
