Core view:
Government work report of the two sessions: setting the tone of the three key points of the real estate market this year. On the whole, the 2022 government work report continues the relevant statements of the central economic work conference at the end of 2021. The expression of real estate mainly includes three key aspects: “meeting the reasonable housing needs of property buyers”, “promoting a virtuous circle and healthy development due to urban policies” and “construction of indemnificatory rental housing”. We analyzed the relationship between the policies of the two sessions and the sales of commercial housing and the revenue of the sector. In 14-15 years, under the downward pressure of fundamentals, the policy warm wind blew frequently, and the sector achieved 26% and 50% of the relative revenue respectively. Since the beginning of 22 years, the relative revenue of the sector has been 11%. We believe that the current fundamentals are similar to 14 years and the policy is similar to 14-15 years.
Know the past and push the present: recovery and comparison in 14-16 years. In February 2014, the real estate market sales entered the negative growth range, and the year-on-year decline in the first half of the year expanded to – 16%. With the gradual implementation of policies, the real estate market went all the way to the good, which led to the rise of house prices in 16 years. In contrast, the market performance since the second half of 21 years is highly similar to that in 14-16 years. The same sales and house prices are down, while land, new construction and investment are more intense than the down.
Where is the current policy? 14-15 year policy resumption: at the central level, in September 2014, the central bank issued new rules for the identification of the first house, which is the beginning of real easing. Then, the down payment ratio of provident fund was reduced in March of 15 years, and the down payment ratio of commercial loan was further reduced in February of 16 years. First tier cities in Beijing City, Shanghai City, Guangzhou and other cities in the past 14-16 years, there are more than 120 cities in the past 40 years. According to incomplete statistics, since the beginning of the year, there have been more than 20 policy easing adjustments in various cities. By comparison, the degree of easing in various dimensions is far from enough. At present, we are still in the initial stage of policy easing, and some policy tools are still in preparation. At the bottom of the path, the number of cities with relaxed policies and the policy tools used will continue to increase. March May is the period of intensive adjustment of local policies. The top-level path and the policy strength and space of “steady growth” at the central level are worth looking forward to.
The affordable housing system is fully sorted out. The overall development of China’s modern housing security system has gone through four stages. At present, affordable rental housing has become the main driving force for the construction of China’s housing security system. According to our calculation, it is estimated that 10.41 million units of affordable rental housing will be built during the 14th Five Year Plan period, and the investment in affordable rental housing will be 2.38-2.65 trillion; In 2022, the pulling effect of affordable rental housing on real estate investment was 2.31% – 3.34%, and the pulling effect was relatively limited.
Investment suggestion: at the current time point, we believe that the main line of “steady growth” will run through the whole year. At present, the meaning of supporting the market is obvious from the central and local levels. Under the background of increasing downward pressure on fundamentals, March may enters the intensive adjustment period of local policies, and the policy strength and space of “steady growth” are worth looking forward to. Under the main line of “stable growth”, the market interpretation path is gradually clear, and there is still room for central state-owned enterprises to rise. At the same time, the market is gradually transitioning from central state-owned enterprise housing to private enterprise housing and property management companies. From the medium-term perspective, we mainly focus on the verification results of two supply side reforms: 1) the market conditions of the first and second rounds of local auction; 2) The above two points are directly related to the medium and long-term profit restoration logic of high-quality real estate enterprises and the change of industry pattern. We suggest paying attention to the leading stocks in the high-quality residential development industry: Vanke A ( China Vanke Co.Ltd(000002) ), Poly Real Estate ( Poly Developments And Holdings Group Co.Ltd(600048) ), Gemdale Corporation(600383) ( Gemdale Corporation(600383) ), China Merchants Shekou Industrial Zone Holdings Co.Ltd(001979) ( China Merchants Shekou Industrial Zone Holdings Co.Ltd(001979) ), Seazen Holdings Co.Ltd(601155) ( Seazen Holdings Co.Ltd(601155) ), Jinke Property Group Co.Ltd(000656) ( Jinke Property Group Co.Ltd(000656) ). It is suggested to pay attention to high-quality property management companies: China Merchants Property Operation & Service Co.Ltd(001914) ( China Merchants Property Operation & Service Co.Ltd(001914) ), Xuhui Yongsheng service (1995. HK), New Dazheng Property Group Co.Ltd(002968) ( New Dazheng Property Group Co.Ltd(002968) ).
Risk warning: the risk that the fermentation of risk events exceeds expectations and the improvement of policy environment is less than expected.
