Comments
According to the economic objectives of the local two sessions, the report proposes that the GDP growth rate of 5.5% is also basically in line with market expectations, and the growth rate of real estate investment is expected to be at least 2.1%. Although the annual GDP growth rate in 2021 was still 8.1%, the GDP growth rate in 2021q3 and Q4 fell significantly and lacked strong support, falling to 4.9% and 4.0% respectively, setting a record low quarterly economic growth rate except 2020q1 (affected by the epidemic); The GDP growth rate of Q3 and Q4 real estate industry was – 1.6% and – 2.9% respectively, which was the first negative growth excluding external factors (2008 financial crisis and 20-year epidemic). This year’s GDP growth target is set at about 5.5%, so the supporting role of real estate is still important. According to our calculation, under the neutral assumption (the growth rate of land purchase area in 22 years is – 6%), the pull of real estate investment on GDP is 0.266 percentage points. We expect that the growth rate of real estate investment in 2022 needs to reach at least 2.1% in order to achieve the growth target of GDP this year. However, at present, the capital pressure of real estate enterprises has not been alleviated, the market boom is low, and the willingness of real estate enterprises to acquire land and start new construction continues to be low. If the current situation continues, there will be great pressure on the growth of real estate investment in the whole year. Therefore, we believe that there is still the possibility of further adjustment of policies at both ends of industry supply and demand. The real estate sales base has not yet reached the local top 100 in September last year, but the sales base has not been gradually improved due to the year-on-year growth of 47.9% in the first quarter of last year
Implement policies to deepen adjustment, and the policy trend of “steady growth” is relatively clear.
Adhere to the basic tone of no speculation in housing and housing, ensure rigid needs, meet the needs of improvement and new citizens. From 2020 to 2022, “housing without speculation” has been written into the government work report for three consecutive years. At the same time, under the goal of “three stabilities”, we should emphasize the support for reasonable housing demand and promote the virtuous circle and healthy development of the real estate industry. We think it is mainly reflected in: 1) guarantee rigid demand, meet and improve. Specifically: on the demand side, relax the purchase restrictions for some people, such as college students, migrant workers, the elderly, etc; Strengthen credit support, appropriately relax the down payment ratio and reduce the mortgage interest rate; At the same time, for the market dominated by rigid demand, there is considerable room for improving demand, and we can pay attention to the relevant incentive policies to boost the improved demand. Recently, we have also seen that Zhengzhou, Qingdao Jimo district and other places have begun to implement some loose policies at the local level, but the actual results and the repair of market sentiment need to be followed up by more high-energy cities. 2) Meet the reasonable purchase consumption of new citizens, implement differentiated housing credit policies due to urban policies, and give new citizens some credit policy support. The China Banking and Insurance Regulatory Commission and the central bank issued a notice to strengthen the financial services of new citizens, with special emphasis on “implementing differentiated housing credit policies according to urban policies, reasonably determining the standard of the first housing mortgage loan of new citizens who meet the purchase conditions, and improving the convenience of borrowing and repayment”. We believe that in view of the reasonable purchase demand of new citizens, the following adjustments may occur, For example, when new citizens buy their first house in non restricted cities, the down payment ratio can be implemented at a minimum of 20%, and the mortgage interest rate can be reduced.
Support the real estate industry to explore new development models. 1) Guide the industry to develop from the old model of “high leverage and high turnover” to a healthy and steady direction.
Since the second half of 2021, real estate enterprises have experienced frequent thunderstorms and the risks in the industry have been continuously cleared, which has made the industry and real estate enterprises fully aware that the old model of realizing rapid growth through high leverage and high turnover has been unsustainable in the current market environment. Scale growth is no longer the main demand of real estate enterprises. They pay more attention to safety and stable operation, and the overall industry is also moving towards health and stability Manage operation driven transformation. 2) In the era when the real estate market focuses on both increment and stock, there are new opportunities for industry development. We believe that the new development model has three key directions, which are reflected in the government work report: Urban Renewal (“orderly promotion of urban renewal”) Housing leasing (“accelerate the development of indemnificatory rental housing”, “adhere to the simultaneous development of rental and purchase, accelerate the development of long-term rental housing market and promote the construction of indemnificatory housing”), comprehensive service providers (“strengthen community service functions”). 3) The real estate “exploring a new development model” is actually guiding the real estate enterprises to layout to relevant sub fields, such as commerce, agent construction, property management, long-term rental apartments, etc. under the current environment of limited growth in the scale of real estate development business, there is still room to improve the revenue and performance contribution of diversified businesses of real estate enterprises in the future, and the risks will be dispersed.
Investment advice
Recently, there are many favorable policies for real estate, but from the perspective of effect, the boosting effect on the market is limited. We believe that we still need to wait for the follow-up of higher-level cities to have real signal significance; At the same time, according to the requirements of economic objectives, the pressure of overall stable growth this year is still large, and real estate still needs to play a supporting role. Therefore, we believe that the pace of policy adjustment at both ends of supply and demand may be further accelerated after the two sessions, and there will be a clearer policy direction after the data of the Bureau of statistics from January to February are released in mid March. From the perspective of sector investment, the expectation of policy improvement is still strengthening. It is strongly recommended to continue to pay attention to the opportunities of the real estate sector in March and April. We suggest paying attention to three main lines: 1) leading real estate enterprises with low credit risk, smooth financing channels and high security: Poly Developments And Holdings Group Co.Ltd(600048) , Gemdale Corporation(600383) , China Merchants Shekou Industrial Zone Holdings Co.Ltd(001979) , Vanke A, Longhu group and China Resources Land. 2) Under the influence of macro and industrial policies such as interest rate reduction, elastic real estate enterprises with large marginal income: Xuhui holding group, Seazen Holdings Co.Ltd(601155) , Jinke Property Group Co.Ltd(000656) . 3) At present, the real estate post cycle property sector with strong income determination, accelerated concentration, recent credit risk mitigation of related real estate enterprises and elastic reversal: Country Garden service, Xuhui Yongsheng life and xinchengyue service.
Risk tips
Real estate regulation continues to upgrade; Sales fell more than expected; Financing continued to tighten.
