Industry comments
The performance of the real estate sector was stable this week, and the property sector lost 300 in Shanghai and Shenzhen. This week, Shenwan A-share real estate sector rose or fell by + 1.2%, ranking sixth among all sectors; Hong Kong stocks and real estate sector rose or fell by – 2.3%, ranking eighth among all sectors. This week, the Hang Seng property service and management index rose or fell by – 4.7%, the Hang Seng China enterprise index rose or fell by – 3.8%, and the Shanghai and Shenzhen 300 index rose or fell by – 1.7%; The relative returns of the property index to Hang Seng China enterprise index and CSI 300 were – 0.9% and – 3% respectively.
On Monday, the sales area of hand houses decreased month on month and year on year. This week (February 26 – March 4), commercial housing transactions in 40 cities totaled 4.71 million square meters, with a week-on-week ratio of – 2% and a year-on-year ratio of – 35%. Among them, first tier cities: week on week – 10%, week on week – 38%; Second tier cities: Weekly ring ratio 0%, weekly year-on-year – 27%; Third and fourth tier cities: Mom + 3%, yoy – 55%.
This week, the transaction area of second-hand houses rebounded month on month and decreased year on year. This week (February 26 – March 4), 17 cities sold a total of 1.35 million square meters of second-hand houses, with a week-on-week ratio of + 11% and a week-on-year ratio of – 28%. Among them, first tier cities: week on week + 8%, week on week – 34%; Second tier cities: Mom + 14%, yoy – 21%; Third tier cities: Mom – 6%, yoy – 66%.
The government work report emphasizes promoting the virtuous circle and healthy development of the real estate industry. ① “Promoting a virtuous circle of the real estate industry” is the first formulation in the relevant statements of the real estate in the government work report in the last 10 years. We believe that this means that the government has realized that the current situation of the real estate industry is still in a “bad circle”, and the future policy will be guided by the return of the real estate industry to the right track. ② The meeting mentioned the establishment of financial stability guarantee fund. We believe that solving the uncompleted phenomenon of the real estate industry and the debt risk of some real estate enterprises or one of their main purposes is expected to achieve greater growth in completion and delivery this year, which is good for high-quality property management enterprises. ③ In his recent speech, Guo Shuqing said that the housing demand of new citizens still exists. We believe that new citizens will form a strong support for the future housing demand, and there will be more credit and the combination policy of liberalizing purchase and loan restrictions on the demand side in the future.
The property market in many cities is favorable and frequent, and market confidence is expected to boost. This week, Zhongshan, Dongguan, Qingdao and other cities issued loose policies such as provident fund and sales restriction. Chongqing, Wenzhou and other cities reduced the down payment ratio or reduced the mortgage interest rate. The notice on promoting the virtuous cycle and healthy development of the real estate industry issued by Zhengzhou is a multi-dimensional real estate market. Different from the unilateral disclosure of the bottom of the credit end in the fourth quarter of 2021, the current trend of coordinated maintenance of the healthy development of the real estate industry by the credit end and local regulation end is taking shape. We believe that more cities will introduce all-round real estate easing policies, and market confidence will be substantially boosted.
Country garden and Midea real estate obtained the amount of M & A financing, and the landing signal of private enterprises was obvious China Merchants Bank Co.Ltd(600036) on the same day, signed a strategic cooperation agreement on real estate M & A with country garden and Midea real estate, granting the M & A financing lines of 15 billion yuan and 6 billion yuan to country garden and Midea real estate respectively, while the previous M & A loans were basically granted to state-owned enterprises, such as poly, China Merchants Shekou Industrial Zone Holdings Co.Ltd(001979) , China Resources Land, China Construction Development International, etc. We believe that the M & a quota granted by China Merchants Bank Co.Ltd(600036) to the two private enterprises this time shows that the operation status of some private real estate enterprises is also relatively safe, and the valuation repair of private real estate enterprises in the future is worth looking forward to.
Investment advice
It is expected that the loose regulation of real estate will be a high probability event in the future, and the industry will stabilize and recover. In the real estate sector, we believe that real estate enterprises with contrarian sales growth will have alpha income, and are optimistic about green city China, China Construction Development International and Hangzhou Binjiang Real Estate Group Co.Ltd(002244) . In the property sector, we believe that after the liquidity crisis of related real estate enterprises is lifted, private property companies have great flexibility in valuation repair, are optimistic about private property management companies with high management density and good development of value-added services, and recommend Jinke service and country garden service.
Risk tips
The real estate regulation policy is loose and less than expected; Market confidence continued to decline
