Industry core view:
Under the macro background of “steady growth”, the fundamentals of the real estate industry continue to stay at the bottom, and the marginal improvement policy continues. It is expected that there are still many favorable policies to be expected in the follow-up, and continue to be optimistic about the market performance of the real estate sector. It is suggested to pay attention to (1) property management companies with good fundamental performance; (2) High quality real estate enterprises with financial stability and background of central enterprises / state-owned enterprises; (3) Real estate enterprises with high-quality holding properties or transformation enterprises, or effectively form a virtuous capital cycle of “development +”.
Key investment points:
Last week’s market review: last week, the real estate industry in Shenwan industry rose 1.23%, and the Shanghai and Shenzhen 300 index fell 1.68%, which was stronger than the market. Since 2022, the real estate industry has fallen by 0.15%, significantly outperforming the CSI 300 index (down 8.99%), with significant relative gains.
Key policy highlights: (1) Premier Li Keqiang proposed in the government work report that we should continue to ensure the housing needs of the masses, adhere to the positioning that houses are used for living, not for speculation, and explore new development models. Adhere to the simultaneous development of rental and purchase, accelerate the development of long-term rental housing market, promote the construction of indemnificatory housing, support the commercial housing market to better meet the reasonable housing needs of buyers, stabilize land prices, house prices and expectations, and promote the virtuous cycle and healthy development of the real estate industry due to urban policies; (2) the State Council held a press conference to promote a sound cycle of economic and financial development and a high quality development. Guo Shuqing, chairman of the Banking Regulatory Commission, said that the financial risks in key areas continued to be controlled in 2021, the macro leverage ratio dropped by about 8 percentage points, and the asset expansion of the financial system returned to a lower level, and the real estate bubble and financial momentum were reversed. (3) Zhongshan, Tangshan, Xuancheng and other places issued documents to increase the amount of housing provident fund loans; (4) The policy of “recognizing both houses and loans” in Zhengzhou was relaxed.
Industry fundamentals: from February 21 to 27, the sales of commercial houses in 30 large and medium-sized cities fell 43% year-on-year, including 10% in the first line, 52% in the second line and 59% in the third line. The supply and construction area of residential land in Baicheng was 8.934 million square meters, with a four-week rolling decrease of 68.4% year-on-year, and a cumulative year-on-year decrease of 61.09% year-on-year, including 40% in first tier cities, 69.77% in second tier cities and 62.05% in third tier cities. The transaction and construction area of residential land in Baicheng was 3.706 million square meters, with a cumulative year-on-year decrease of 64.59%, including 78.95% in the first line, 65.96% in the second line and 62.18% in the third line. The premium rate of residential land in Baicheng was 0.5%, down 3.6 percentage points month on month.
Dynamics of key companies: China Fortune Land Development Co.Ltd(600340) nearly 80 residential projects in 33 regions of the country have resumed work simultaneously China Fortune Land Development Co.Ltd(600340) said that nearly 80 residential projects, more than 70000 sets and about 10 million square meters of projects will be delivered on schedule in 2022. The M & a loan of private real estate enterprises landed for the first time. Midea real estate obtained China Merchants Bank Co.Ltd(600036) 6 billion yuan of M & A financing line and 6 billion yuan of special housing mortgage loan line, and country garden obtained China Merchants Bank Co.Ltd(600036) 15 billion yuan of M & A financing line.
Risk factors: the policy strength is less than expected, the industry fundamentals continue to decline rapidly, and the credit risk is higher than expected.
