Event: at 9:00 a.m. on March 5, 2022, the opening meeting of the fifth session of the 13th National People’s Congress was successfully held. Premier Li Keqiang proposed in the government work report that in the face of new downward pressure, steady growth should be put in a more prominent position to support the commercial housing market to better meet the reasonable housing needs of home buyers.
Key investment points
Steady growth and risk prevention need to stabilize real estate: the government report of the two sessions mentioned that the economic development target of GDP + 5.5% and CPI + 3% in 2022 should put steady growth in a more prominent position for the new downward pressure. The real estate industry chain has a significant impact on GDP. The bilateral downward pressure of supply and demand in 2021h2 industry continues until February 2022. GDP5. The growth target of 5% has been clear, and only by stabilizing real estate can we achieve stable growth; To prevent and resolve major risks, we need to resolve the risks of the real estate industry first. We believe that “resolving potential risks in a market-oriented and legal way” does not mean saving all enterprises in danger. On the basis of resolving risks, the industry supply side continues to promote structural optimization, and high-quality enterprises can embrace the spring after the optimization of the industry pattern.
The development trend of both rent and purchase is clear: this meeting mentioned the need to accelerate the development of the long-term rent market, promote the construction of affordable housing, and better meet the reasonable needs of commercial housing. Combined with the meeting of the State Council Information Office on March 2, we believe that the trend of policy guidance to establish a multi-level supply market is clear, the construction of rental housing is increased, and the commercial housing market supports reasonable demand around “new citizens” (documents to be issued by the central bank and the China banking and Insurance Regulatory Commission). “New citizens” refer to those who have lived in cities and towns but have no registered permanent residence; Or just got a hukou for less than two or three years. According to the statistics of the central bank, the population is about 300 million.
It is expected that the relaxation of urban policies will be strengthened: at the beginning of March, the relaxation of some cities will be upgraded, such as the relaxation of purchase and loan restrictions in Zhengzhou, the relaxation of down payment ratio in Jinzhong, and the relaxation of sales restrictions in Jimo. The relaxation trend of the industry is basically in line with the idea of policy relaxation at both ends of supply and demand in our in-depth report “what are the repair paths of the real estate industry” released on February 11. Considering that the sales of the top 100 real estate enterprises are still weak from January to February, and the two sessions set the tone of steady growth + risk prevention, we believe that after the two sessions, the relaxation of urban implementation policies will be upgraded compared with February. Around the release of “reasonable demand” to the extension of purchase, loan and sales restrictions, the industry fundamentals are expected to rebound at the end of March (pay attention to the sales visits, removal rate and other indicators of key real estate enterprises in March).
Investment suggestion: strengthen the policy correction + the industry expects that the bottom repair will bring investment opportunities in the real estate sector.
1) track development: after the two sessions, the policy correction efforts were strengthened, the beta market of the sector continued, and the goal of resolving industrial risks was clear. The soundness of blue chip targets + the optimization of beneficiary industry pattern continue to be optimistic: Poly Developments And Holdings Group Co.Ltd(600048) , China Merchants Shekou Industrial Zone Holdings Co.Ltd(001979) , China Resources Land, China overseas development, China Vanke Co.Ltd(000002) , Gemdale Corporation(600383) , Longhu group and green city China. “Small and beautiful” targets with stable finance and high-quality layout: China Construction Development International and Hangzhou Binjiang Real Estate Group Co.Ltd(002244) . High quality private enterprises are more resilient to repair and continue to be optimistic: Xuhui holdings, Seazen Holdings Co.Ltd(601155) , Jinke Property Group Co.Ltd(000656) .
2) property racetrack: the risk resolution of related real estate enterprises promotes the valuation repair of property enterprises, and the long-term growth of property enterprises with stronger independence is better. Leading steady targets: China Resources Vientiane life, poly property, CNOOC property and green city service. Elastic targets: Xuhui Yongsheng, Jinke service and Xincheng Yue.
3) agent construction track: the increase of rental housing supply is a new growth track in 2022. The supply can be increased through new construction or stock transformation. In 2022, the number of newly-built rental houses will increase, and attention will be paid to the opportunity of agent construction. The relevant target: Greentown Management Holdings.
Risk tip: individual real estate enterprise risk events interfere with the valuation and repair of the sector.
