The people’s Bank of China and the China Banking and Insurance Regulatory Commission jointly issued a notice to alleviate the pain point of industry M & A. M & A is the main path for the spontaneous liquidation of the industry in this round: under the background of asymmetric real estate credit recovery, relying on industry M & A to digest non-performing assets may be the main path for the liquidation of industry risks in this round. Previously, the market questioned the acquisition logic for several reasons: 1) the three red lines of high-quality real estate enterprises are still limited; 2) The M & a process of central enterprises is too complex; 3) High asset quality and price of private enterprises; 4) When the sales expectation is uncertain, the reinvestment expectation is cautious.
Recent improvements: 1) the demand side is indeed repaired from the data. In November, the year-on-year growth rate of national commercial housing sales in a single month was repaired. Since December, high-frequency sales data show that the sales area of new houses in key cities has further narrowed year-on-year. More than 20 cities have released positive signals at the level of urban policies such as provident fund support, loose purchase restrictions and house purchase subsidies, and the improvement of mortgage quota has gradually realized the transmission of interest rate and lending cycle. 2) Financial institutions’ capital and service support were further optimized. This document is expected to alleviate the concerns of enterprises about M & A in many aspects, including revitalizing the liquidity of the assets of the insured real estate enterprises, improving the matching efficiency while providing financial support, improving the cash flow at the project level, further improving the follow-up support, etc.
Sales of new houses, second-hand houses and land markets continued to improve year-on-year
The new housing market traded 7.07 million square meters this week, with a monthly year-on-year increase of – 13.49%, an improvement of 6.46 PCT compared with the previous month; The accumulated inventory was 167.63 million square meters, the first-line, third-line and below were accelerated, and the second-line was slowed down. The second-hand housing market traded 1.38 million square meters this week, with a monthly year-on-year increase of – 30.84%, an improvement of 2.08 PCT compared with the previous month. The land market traded 22.51 million square meters this week, rolling for 12 weeks, with a year-on-year increase of – 53.61%; The total turnover was 28.7 billion yuan, rolling for 12 weeks, with a year-on-year increase of – 41.83%; The national average premium rate was + 1.57%, rolling for 12 weeks, year-on-year -10.36pct.
This week, Shenwan real estate index was 1.23%, up 1.94 PCT from last week, ranking 5 / 31, leading the Shanghai and Shenzhen 300 index by 1.91 PCT. In terms of H shares, this week’s wind Hong Kong real estate index was – 0.48%, up 4.77pct from last week, ranking 9 / 11, underperforming the Hang Seng Index by 0.61pct; The kroney leading index of real estate stocks was – 1.17%, up 6.40pct from last week.
Grasp the improvement of M & A on the left and concentration on the right
Investment suggestions: Recently, the management has made intensive statements to guide the industry towards a more standardized stable and healthy development period in the medium and long term, short-term policy adjustments to alleviate pessimistic sales expectations, affordable rental housing to hedge against the decline of potential development investment, and promote the industry to return to a virtuous circle and healthy development. The future industry beta depends on the adjustment of industry structure, the pace of capacity clearing and the strength of policy support; Alpha focuses on the repair of the balance sheet and profit margin of key real estate enterprises by M & A, the accuracy of countercyclical plus leverage, and the long-term excavation of the value of housing scenarios. Suggestions: 1) high quality leaders: Gemdale Corporation(600383) , Poly Developments And Holdings Group Co.Ltd(600048) , rongchuang China, China Vanke Co.Ltd(000002) , Longhu group, China Merchants Shekou Industrial Zone Holdings Co.Ltd(001979) ; 2) High quality growth: Jinke Property Group Co.Ltd(000656) , Seazen Holdings Co.Ltd(601155) , Jiangsu Zhongnan Construction Group Co.Ltd(000961) , Xuhui holding group; 3) High quality property management: Country Garden service, xinchengyue service, Greentown service, China Merchants Property Operation & Service Co.Ltd(001914) , poly property.
Risk warning: industry credit risk spread; The downward cycle of industry sales begins; Administrative regulation remained high-pressure, and the pilot strength of real estate tax exceeded expectations
