Core view of this week: at the opening of the fifth session of the 13th National People's Congress, the government work report put forward the GDP target growth rate of 5.5% in 2022 and 4% in the fourth quarter. The downward pressure on the economy remains. Previously, the central economic work conference also proposed that China's economy will face triple pressures in 2022: demand contraction, supply shock and weakening expectations, It also puts forward that "stability takes the lead and seek progress in stability" in 2022, and the intention of steady growth of economic work is obvious. In the second half of 2021, the land market was cold, affected by capital pressure, the willingness to start new construction fell to the freezing point, and sales also plummeted under the triple pessimistic expectations of economy, industry and real estate enterprises, which dragged down the macro-economy as a whole. In the past, real estate itself made a great contribution to economic growth, and the industrial chain also had an indirect impact on the upstream and downstream raw materials and consumer industries. This economic model is difficult to fundamentally reverse in the short term. Therefore, we believe that the goal of GDP growth of 5.5% still needs real estate.
Key policy analysis: 1) the formulation of the government work report on real estate is to continue the general tone of real estate without speculation, and put forward the goal of "three stabilities", policies for cities, virtuous circle and healthy development, and meet reasonable housing needs. Reasonable housing demand is intended to further release the demand for improvement. Due to the formulation of urban implementation policy, it is expected that more cities will join the local real estate easing in the future. The virtuous circle and healthy development are intended to resolve industry risks and prevent the accelerated thunder of real estate enterprises. 2) The China Banking and Insurance Regulatory Commission and the Central Bank jointly issued the notice on strengthening the financial services of new citizens, proposing to meet the credit needs of new citizens for house purchase and break through the purchase and loan restrictions from the perspective of new citizens. 3) The Zhengzhou municipal government issued the notice on loosening the monetary policy of the second line of land purchase and the people's Government of Zhengzhou, as the key point of promoting the healthy development of the second line of housing supply, and the people's Government of Zhengzhou The substantive easing policy signal has strong demonstration significance.
One week market review: this week (2022 / 2 / 282022 / 3 / 6), Shenwan real estate rose by 1.23%, outperforming the Shanghai Composite Index by 1.34pct, ranking 7th / 32 among various sectors, and the Hang Seng real estate construction industry index fell by - 2.34%, outperforming the Shanghai Composite Index by 2.23pct. The real estate companies with the top three increases this week are: Sundy Land Investment Co.Ltd(600077) (34.19%), Casin Real Estate Development Group Co.Ltd(000838) (22.14%), Shanghai Jinqiao Export Processing Zone Development Co.Ltd(600639) (20.39%). The top three real estate companies that fell this week were Yinyi Co.Ltd(000981) (- 21.5%), Zhongliang Holdings (- 18.24%) and rongchuang China (- 16.86%). This week (2022 / 2 / 282022 / 3 / 6), the Hang Seng property service and management sector fell - 4.71%, underperforming the Shanghai Composite Index by 4.6pct and the Hang Seng China enterprise index by 0.89pct, ranking 15th / 28 among various sectors. Only Hongyang service (0.56%) rose this week, and the top three companies that fell this week were Baolong Commerce (- 13.58%), rongchuang service (- 11.81%) and Xingsheng Commerce (- 11.02%).
Real estate market monitoring: this week (2022 / 2 / 262022 / 3 / 4), the transaction area of new houses in 30 large and medium-sized cities was 2.4537 million square meters, a month on month decrease of 7.4% and a year-on-year decrease of 29.3%. The transaction area of second-hand houses in 16 cities was 1.3837 million square meters, an increase of 12.9% month on month and a year-on-year decrease of 19.8%. Last week (2022 / 2 / 212022 / 2 / 27), the land supply and construction area of 100 large and medium-sized cities was 291489 million square meters, a year-on-year decrease of 31.7% and a month on month increase of 49.0%. The land transaction and construction area was 176391 million square meters, a year-on-year decrease of 43.4% and a month on month decrease of 11.8%. Due to the batch sales ratio of 1.65, the land supply increased, but the land heat still did not rise.
Financing of real estate enterprises: this week (2022 / 2 / 282022 / 3 / 6), the total amount of domestic new bonds issued by real estate enterprises was 15.49 billion yuan, up 16% year-on-year and 13.82% month on month. In terms of trust issuance, 22 real estate trusts were issued this week, with an issuance scale of 3.405 billion yuan, an average annual yield of 7.63% and an average period of 1.54 years.
Risk factors: policy risk: the progress of policy relaxation is less than expected, and the policy regulation of real estate tax and pre-sale funds is more than expected. Market risk: the decline of sales in the real estate industry exceeded expectations.
