Industry fundamentals: the whole year rose and fell, and the data fell in an all-round way
After the policy set the tone of “no speculation in housing” and “no real estate as a short-term means to stimulate the economy”, the industry officially entered the deleveraging cycle in 2021 under the action of a series of tightening policies. The fundamentals of the whole year rose first and then declined. After entering the second half of the year, the data continued to fall. Looking forward to 2022, due to the continuous impact of regulatory policies, both ends of market supply and demand will continue to be restrained. However, considering that certain improvement is expected after the policy stage is too tight, in conclusion, we expect the annual sales area growth rate to be about – 10%, the sales amount growth rate to be about – 10%, and the real estate investment growth rate to be about – 5%.
Sector performance: the performance has declined and the valuation is still low
In the first three quarters of 2021, the overall performance growth of the sector has declined to a certain extent, but the performance of the leading real estate enterprises is relatively strong. Considering that a series of regulatory policies are more conducive to the stable and healthy development of the industry, are conducive to the leading real estate enterprises with strong comprehensive strength to increase their market share, and are relatively less affected by the policies in the future, therefore, We continue to be optimistic about the head real estate enterprises with strong robustness. In addition, the current valuation of A-share and H-share real estate sectors is still at a historically low level, with good long-term investment value.
Policy: the policy disturbance is strengthened, and the real estate tax is gradually approaching
At the central level, the tone of the real estate regulation policy is tightening, and its governance ideas basically focus on the main tone of “real estate is not fried”. In terms of specific measures, this year, there are local auction of the “two concentration” new deal, “notice on bank loan concentration”, “three red lines” indicators, and strengthened supervision of pre-sale funds. At the same time, the accelerated implementation of real estate tax has also attracted market attention. Generally speaking, the regulation and control efforts in 2021 are relatively strong, especially at the implementation level, which is too tight. Under the background of frequent industrial risk events and the overall decline of industrial data, the market’s expectation of the bottom of the policy is gradually strengthened. We believe that the real estate industry is still the ballast of the national economy, and the excessive fluctuation of the industry also deviates from the goal of the policy pursuit of “three stabilities”, It is expected that the excessively tight policy is expected to correct the deviation, and there is no need to be too pessimistic about 2022.
Investment advice
In 2021, the real estate sector was impacted by too tight policy regulation, and the industry fundamental data were also in a downward period. However, the expectation of the bottom of the policy has been strengthened, so there is no need to be too pessimistic about 2022. At present, the industry valuation is still low, with strong performance certainty and high dividends, which deserves special attention. We mainly recommend leading real estate enterprises with strong performance certainty Poly Developments And Holdings Group Co.Ltd(600048) , China Vanke Co.Ltd(000002) , China Merchants Shekou Industrial Zone Holdings Co.Ltd(001979) , Hangzhou Binjiang Real Estate Group Co.Ltd(002244) , etc. Relevant beneficiary objects include Longhu group, Xuhui holding group, China Resources Land, China overseas development, green city China, etc. In addition, the property management industry has a broad development space, and the prosperity continues to improve. The relevant beneficiaries include country garden service, green city service, Xuhui Yongsheng life service, China Resources Vientiane life, etc.
Risk statement
Continued tightening of regulatory policies led to a decline in sales; Excessive provision for inventory falling price causes the performance to fail to meet expectations.
