Industry core view:
Under the macro background of “steady growth”, the fundamentals of the real estate industry continue to stay at the bottom and the marginal improvement policy continues. Under the policy framework of urban implementation, it is expected that there are still many favorable policies to be expected in the future, and continue to be optimistic about the market performance of the real estate sector. It is suggested to pay attention to (1) property management companies with good fundamental performance; (2) High quality real estate enterprises with financial stability and background of central enterprises / state-owned enterprises; (3) Real estate enterprises with high-quality holding properties or transformation enterprises, or effectively form a virtuous capital cycle of “development +”.
Key investment points:
Last week’s market review: last week, the real estate industry in Shenwan class industry fell 3.22%, and the Shanghai and Shenzhen 300 index fell 1.67%, which was weaker than the market. Since 2022, the real estate industry has fallen by 1.37%, and the CSI 300 index has fallen by 7.43%, with significant relative gains.
Key policy highlights: (1) the State Information Office held a press conference to promote the high-quality development of housing and urban-rural construction. Minister of housing and urban rural development Wang Menghui pointed out that this year, the real estate market will continue to operate smoothly, maintain the continuity and stability of regulatory policies, and enhance the accuracy and coordination of regulatory policies. Resolutely and effectively deal with the risk of overdue delivery of real estate projects of individual real estate enterprises, so as to ensure the rigid demand for housing and meet the reasonable improvement demand at the same time. We will promote the structural reform of the housing supply side and vigorously increase the supply of affordable rental housing. It is expected that 2.4 million affordable rental housing units will be built and raised throughout the year, 100000 public rental housing units will be raised and 1.2 million shantytowns will be transformed; (2) The China Banking and Insurance Regulatory Commission and the Ministry of housing and urban rural development issued the guiding opinions on the support of bank insurance institutions for the development of indemnificatory rental housing. Commercial banks should optimize and integrate financial resources, actively meet the service needs of the development and construction, purchase, decoration and transformation, operation management, transaction settlement and other services of indemnificatory rental housing, and provide professional and diversified financial services; (3) Nanning, Shanxi Jinzhong and other places officially issued documents to reduce the down payment ratio of housing provident fund loans; (4) Shanghai, Xiamen, Jinjiang and other cities have released land supply information.
Industry fundamentals: affected by the base, the decline in sales has narrowed, and the performance of the land market is still weak. From February 14 to 20, the sales of commercial houses in 30 large and medium-sized cities fell 45% year-on-year, including 22% in the first line, 54% in the second line and 59% in the third line; The supply and construction of residential land in Baicheng fell by 62.9% year-on-year, 64.31% year-on-year, 77.1% year-on-year, and the premium rate of residential land in Baicheng was 4.1%, up 2.7 percentage points month on month.
Key company developments: China Merchants Property Operation & Service Co.Ltd(001914) facility operation company successfully won the bid for Alibaba group Fanxing project and East China IDC data center project; Evergrande signed cooperation agreements with Everbright trust and Minmetals trust respectively to sell the relevant equity of four projects; As for the medium-term financing of RMB 1.7 billion of bonds issued by real estate companies, some of the proposed medium-term financing of RMB 1.5 billion of bonds issued by real estate companies are no longer used for the medium-term financing of RMB 1.7 billion of bonds issued by real estate companies, and some of them are no longer used for the medium-term financing of RMB 1.5 billion of bonds issued by real estate companies.
Risk factors: the policy strength is less than expected, the industry fundamentals continue to decline rapidly, and the credit risk is higher than expected.
