Industry comments
The performance of the real estate sector was higher this week, mainly because the central bank encouraged banks to carry out real estate M & A loans. This week, Shenwan A-share real estate sector rose or fell by + 1.2%, ranking fifth among all sectors. We believe that this is mainly because the central bank and the China Banking and Insurance Regulatory Commission jointly issued the notice on doing a good job in M & a financial services for risk disposal projects of key real estate enterprises this week, and held a symposium to encourage banks to carry out M & a loan business in a stable and orderly manner, focusing on supporting high-quality real estate enterprises in M & A and high-quality projects of large real estate enterprises in danger and difficulties. We believe that the current logic of large-scale M & A in the real estate industry is not tenable, and a large number of small and medium-sized real estate companies are less likely to be acquired. Because the profit margin of the projects waiting for M & A in the current market is generally not high, and there are other hidden risks. At present, the competition in the bidding, auction and listing market has slowed down because most real estate enterprises are short of cash. At this time, the profit margin of bidding, auction and listing land is higher and the risk is less. Therefore, we believe that the buyer will not buy stock projects on a large scale. However, the possibility of M & A for some high-quality projects still exists, especially for some projects originally won by the cooperation between the two real estate enterprises. Because the buyer knows the root of the project, the time and energy required for negotiation and adjustment are less, and the probability of M & A is relatively higher.
The fourth quarter regular meeting of the central bank once again mentioned "safeguarding the legitimate rights and interests of housing consumers and better meeting the reasonable housing needs of home buyers" and "striving to ensure that the financial support for private enterprises is commensurate with the contribution of private enterprises to economic and social development". We expect that in the future, financial institutions will have greater support in debt extension and financing of real estate enterprises. In addition, "guaranteed delivery" is the primary goal at present. There is little possibility of significant adjustment of pre-sale fund supervision, but the acceleration of mortgage and the adjustment of pre-sale conditions can still form a joint force to help real estate enterprises improve payment collection.
On Monday, the sales of hand houses in the first and third tier cities rebounded month on month, and the second tier still decreased. This week (from December 18 to December 24), commercial housing transactions in 40 cities totaled 5.12 million square meters, with a week on week ratio of - 21%, a week on year ratio of - 34%, a monthly cumulative year-on-year ratio of - 26%, and an annual cumulative year-on-year ratio of + 8%. First tier cities: week on week ratio of + 56%, week on year ratio of - 53%, a monthly cumulative year-on-year ratio of - 49%, and an annual cumulative year-on-year ratio of + 13%; second tier cities: week on month ratio of - 33%, week on year ratio of - 22%, a monthly cumulative year-on-year ratio of - 11%, and; Third and fourth tier cities: yoy + 5%, yoy - 45%, cumulative yoy - 48% and cumulative yoy + 1%.
This week, second-hand housing transactions warmed up in the first tier cities, and still decreased in the second and third tier cities. This week (from December 18 to December 24), the second-hand housing transactions in 17 cities totaled 1.44 million square meters, with a week on week ratio of - 1%, a week on year ratio of - 33%, a monthly cumulative year-on-year ratio of - 34%, and an annual cumulative year-on-year ratio of - 8%. Among them, the first tier cities: week on week ratio of + 20%, week on year ratio of - 33%, a monthly cumulative year-on-year ratio of - 37%, and an annual cumulative year-on-year ratio of - 8%; the second tier cities: week on month ratio of - 5%, week on year ratio of - 29%, a monthly cumulative year-on Ratio - 8%; Third tier cities: Mom - 34%, yoy - 61%, cumulative yoy - 65% and cumulative yoy - 11%. Among them, second-hand houses in Chengdu performed well, with 297000 square meters of transactions this week, with a year-on-year growth rate of 174%. We think this confirms the obvious acceleration of mortgage lending of second-hand houses in Chengdu.
Investment advice
In the real estate sector, state-owned enterprises with sound operation are recommended in the short term, such as Poly Developments And Holdings Group Co.Ltd(600048) and China Construction Development International. We expect that after the Spring Festival next year, some private real estate enterprises will usher in a wave of valuation repair. Because the debt repayment peak of the industry has passed by then, it will be more clear who is the leftover in the private real estate enterprises and the industry pattern. We think rongchuang China and Seazen Holdings Co.Ltd(601155) are more flexible. In the property sector, we believe that private property companies will have greater flexibility in future valuation repair after the liquidity crisis of related real estate enterprises is lifted. Recommend Jinke service, Jianye new life and country garden service.
Risk statement
The implementation effect of real estate improvement policies is less than expected; M & A integration is less than expected
