Core view
New houses: the transaction continues to run at a low level; 1、 The second tier cities rebounded month on month, and the third tier continued to callback. The transaction area of new houses in 46 cities was 21.013 million square meters, an increase of 9.0% month on month and a year-on-year decrease of 25.1%. 1、 The month on month growth rates of the second and third tier cities were + 12.1%, + 27.4% and – 2.5% respectively, and the year-on-year growth rates were – 13.6%, – 9.8% and – 38.8% respectively. The first tier cities rebounded month on month, with a year-on-year decrease of 0.8pct; The degree of second-line callback narrowed. We believe that the closing month at the end of December may usher in a high volume, but the demand is still under pressure, and the overall transaction will still run at a low level.
Second hand housing: the transaction scale rebounded month on month and narrowed year-on-year. The transaction area of second-hand houses in 16 cities was 4.649 million square meters, an increase of 40.7% month on month and a year-on-year decrease of 37.3%. 1、 The month on month growth rates of the second and third tier cities were + 36.7%, + 53.2% and + 45.9% respectively, and the year-on-year growth rates were – 38.0%, – 29.4% and – 50.1% respectively. The 12 cities showed varying degrees of month on month rise, with Chengdu and Suzhou picking up year-on-year, while the year-on-year decline narrowed in Shenzhen, Hangzhou and other cities. Dongguan increased by 126% month on month, or related to the reduction of second-hand housing transaction tax rate this month. We believe that mortgage loans in some hot cities have shown signs of loosening recently. In the early stage, the supervision of second-hand housing is strict and effective, and the market has been benign restrained. In some cities with depressed second-hand housing market, there are adjustment expectations.
Inventory and decommissioning: affected by the continuous downturn in transactions, the overall inventory and decommissioning cycle increased month on month, and the decommissioning cycle in Shanghai was less than 6 months. As of November 30, the inventory area of new houses in 14 cities was 103.198 million square meters, a month on month increase of + 3.8% and a year-on-year increase of + 0.5%; The decontamination cycle was 10.7 months, with a month on month increase of + 6.4% and a year-on-year increase of + 16.7%. 1、 The month on month growth rates of inventory area in second and third tier cities were + 6.5%, + 3.1% and + 1.7% respectively, and the year-on-year growth rates were + 1.2%, – 1.6% and + 12.5% respectively; The decontamination cycle was 8.6 months, 9.8 months and 12.3 months respectively, with month on month growth rates of + 3.4%, + 11.2% and – 0.5% respectively, and year-on-year growth rates of + 10.3%, – 7.0% and + 58.4% respectively.
Sales of real estate enterprises: the monthly sales of the top 100 real estate enterprises continued to cool, and the cumulative growth rate of equity caliber turned negative. The monthly equity sales of the top 100 real estate enterprises in November were 570.2 billion, Year on year – 42.7% (previous value – 34.0%); accumulated 8.1 trillion yuan, year-on-year – 1.14% (previous value: + 4.6%). Among the top 20 real estate enterprises, only Gemdale Corporation(600383) Sales in a single month still maintained positive growth, and the rest fell; The average sales target completion rate is 80%. We believe that the sales of real estate enterprises will continue to be under pressure at the end of the year. At present, the expected market bottom has not really come, and it is difficult to be optimistic about the real estate market in the short term.
Land market: 1) the volume and price fell together, the transaction construction surface was – 15.2% year-on-year, and the average floor price was – 17.5%; Although the three batches of centralized soil auction rules were slightly relaxed, the low operation of the premium rate has not been reversed, and the premium rate is only 2.9% this month. 2) From the second batch to the third batch, the local auction heat continued to decline, the profit margin continued to improve, and the government appropriately reduced the margin ratio. There are four cities in November (Wuxi, Suzhou, Nanjing and Shenzhen) completed three batches of centralized land transfer, and the margin ratio of the three batches of four cities decreased by 5.7pct to 31% compared with the second batch; the land premium rate decreased by 3.4pct to 2% compared with the second batch, the reserve price transaction rate increased by 31.7pct to 80% compared with the second batch, and the peak transaction rate decreased by 29pct to 10% compared with the second batch. The expected gross profit margin of the third batch increased by 6.3pct compared with the second batch, compared with the first batch Batch increased by 12.3pct.
Investment advice
We believe that the end of this year and the beginning of next year may be a better investment time point. The main reasons are as follows: 1) the “policy bottom” of real estate may have initially appeared, and the central government continues to release good signals for real estate. Previously, it mainly focused on the mitigation of the financial pressure of real estate enterprises. However, at the meeting of the Political Bureau of the CPC Central Committee on December 6, it was mentioned to better meet the reasonable housing needs of property buyers, Promote the healthy development and virtuous cycle of the real estate industry, pay attention to the core contradiction of sluggish sales and weak demand, and we are optimistic about the further loosening of the follow-up demand side policies. 2) It still takes time for all real estate entities to restore their market confidence. There is still downward pressure on the fundamentals of subsequent industries, and there is also pressure on the investment growth rate to continue to fall. Based on the large contribution of real estate to the national GDP and local finance, Q4 economic growth and local finance will face certain pressure, and the policy adjustment is expected to be further strengthened. 3) The three batches of centralized land auction can alleviate the short-term cash flow pressure of real estate enterprises and ensure the profit space of real estate enterprises, so as to moderately improve the participation of real estate enterprises by appropriately reducing the proportion of land deposit and the proportion of first payment, appropriately relaxing the payment period of land transfer fees, and moderately canceling the guidance price or house price restrictions, To some extent, it can solve one of the core contradictions of the low profit margin of the real estate industry.
We suggest to pay attention to: 1) development sector: Poly Developments And Holdings Group Co.Ltd(600048) , Gemdale Corporation(600383) , Vanke A, Longhu group and China Resources Land. 2) Property sector: Country Garden service, Xuhui Yongsheng service, China Resources Vientiane life, xinchengyue service and Baolong business.
Risk statement
Real estate regulation continues to upgrade; Sales fell more than expected; Financing continued to tighten.
