Market review this week. In the 9th week, the real estate sector index was stronger than the CSI 300 index and the gem index. The relative return of the real estate sector compared with the CSI 300 index was + 2.9%. The CSI 300 index closed at 449643, with a weekly increase of – 1.7%; The gem index closed at 274864, with a weekly increase of – 3.8%; The real estate sector index closed at 336646, with a weekly increase of + 1.2%.
Industry highlights this week. The central bank said that it should steadily implement the prudent management system of real estate finance and promote a virtuous circle due to urban policies. SASAC said that it is necessary to strengthen investment control in real estate, finance and other fields, and prohibit debt investment beyond financial affordability. Beijing plans to initially build a 2-hour traffic circle in Beijing Tianjin Hebei Urban Agglomeration and a 1-hour commuter circle in Beijing metropolitan area. The two sessions determine the annual economic growth, 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 circle and healthy development of the real estate industry due to urban policies.
Sales of new houses this week decreased compared with last week, while sales of second-hand houses increased compared with last week. In the 9th week, the sales of new houses in 29 major cities was 27000 units, a decrease of 5.1% compared with the 8th week; The sales of second-hand houses in 11 major cities were 9000 units, an increase of 19.8% over the 8th week; Compared with the eighth week, the growth rates of new housing and second-hand housing transactions in first tier cities were – 17.6% and 11.5% respectively; Compared with the eighth week, the growth rates of new housing and second-hand housing transactions in second tier cities were – 3.6% and 15.0% respectively. Inventory decreased compared with last week, and inventory sales increased compared with last week. As of the 9th week, the inventory in 15 major cities was 1.206 million units, a decrease of 13000 units compared with the 8th week; The stock to sales ratio was 15.0 months, an increase of 0.1 months over the 8th week. The land market transfer heat this week was flat compared with last week. In week 9, a total of 4 pieces of land were sold in 26 major cities. The average premium rate increased. In the 9th week, the average premium rate of land transactions in 26 major cities was 6.1%, an increase of 6.1 percentage points over the 8th week. In week 9, the number of land auction in 26 big cities was 0.
Announcement of key companies China Vanke Co.Ltd(000002) , Jiangsu Zhongnan Construction Group Co.Ltd(000961) released the sales data in February 2022 Annual performance report China Vanke Co.Ltd(000002) plans to issue bonds of no more than 1.99 billion yuan Shanghai Lujiazui Finance & Trade Zone Development Co.Ltd(600663) , Shanghai Lingang Holdings Co.Ltd(600848) , Wuhan East Lake High Technology Group Co.Ltd(600133) completed the issuance of bonds.
New home sales fell this week, and the sales side still did not improve. The two sessions held this week set the annual economic growth rate at 5.5%, put forward relevant support policies for rent and sale for new citizens, and deleted the relevant expressions of real estate tax. It is conceivable that the policy side is expected to be further relaxed. We believe that the policy may show an average force at both ends: the supply side promotes the clearing of the industry, the state-owned enterprises and high-quality private enterprises take over the projects, and some cities with little pressure on house price rise at the demand side can further relax the regulation. Based on this framework, looking for marginal real estate enterprises is not a good strategy. We are still optimistic about the performance of real estate stocks in the future. We recommend the combination of state-owned enterprises and high credit private enterprises, Poly Real Estate ( Poly Developments And Holdings Group Co.Ltd(600048) , buy), China Vanke Co.Ltd(000002) ( China Vanke Co.Ltd(000002) , buy); Second tier leaders with flexible performance are recommended Gemdale Corporation(600383) ( Gemdale Corporation(600383) , buy), Longhu group (00960, buy), Xuhui holding group (00884, buy). At the same time, we are optimistic about the property management and business management industries with rapid growth and strong consumption attributes. We recommend Country Garden Service (06098, buy), poly property (06049, buy), China Merchants Property Operation & Service Co.Ltd(001914) ( China Merchants Property Operation & Service Co.Ltd(001914) , overweight), New Dazheng Property Group Co.Ltd(002968) ( New Dazheng Property Group Co.Ltd(002968) , buy), rongchuang service (01516, buy), Xingsheng Commerce (06668, buy).
Risk tips
Sales were significantly lower than expected. The counter cyclical policy was less than expected. Interest rates have risen significantly. Investment proposal and investment object
