One side is the ubiquitous “double killing of stocks and debts” of high leverage real estate enterprises, and the other side is the steady real estate enterprises represented by central state-owned enterprises. The stock price of real estate enterprises rises against the current. Before the reshuffle of sales scale, the reshuffle of market value of real estate enterprises in the head takes the lead!
On March 14, both A-Shares and Hong Kong shares suffered Black Monday, and real estate stocks were not spared. From the perspective of real estate enterprises at the head of a shares, China Vanke Co.Ltd(000002) fell by more than 3%, led the decline, Gemdale Corporation(600383) , China Merchants Shekou Industrial Zone Holdings Co.Ltd(001979) also floated green, Poly Developments And Holdings Group Co.Ltd(600048) rose and fell, and the closing was still red. In terms of housing stocks in Hong Kong stocks, almost all of them were green, with a decline of 9.25%, Longguang group and country garden fell by about 19%, Longhu group and China Jinmao fell by more than 10%, and China Resources Land and China overseas development fell by 5%.
This trend made poly surpass Vanke to the top of the A-share market value “first brother” on Friday, and “kill” China Resources Land and CNOOC real estate in one day, becoming the market value leader of the whole China’s real estate industry. Poly’s internal “three for one” did not expect to take the lead in the capital market. In 2021, the market value of country garden, the “universal real estate enterprise” with the largest sales scale, officially fell below HK $100 billion, ranking seventh in the industry.
Insiders pointed out that at present, China’s real estate industry is coming to a crossroads, and central enterprises and state-owned enterprises will probably grasp the development of the industry in the future
Initiative and guide the industry to a new stage. Stable private enterprises also have certain advantages. For the enterprises that have been in danger, there may be two final outcomes. One is that the self-help is unsuccessful, and they will directly withdraw from the industry or become a subsidiary of the central state-owned enterprise. The other is that the self-help is effective, but it takes a lot of energy, hurts muscles and bones, and the scale of self-help will be relatively limited.
poly counter attacks Vanke China Resources
China fund reported last weekend that on March 11 (last Friday) Poly Developments And Holdings Group Co.Ltd(600048) rose from 2.6% to 0.43%, the market value was set at 194.3 billion, China Vanke Co.Ltd(000002) rose from 3.88% to 0.72%, the market value finally recorded 193.6 billion, and poly surpassed Vanke’s 700 million to become the first brother in the market value of A-share real estate enterprises, creating a 17 year history of falling in love with each other in A-share since the two companies were listed.
Unexpectedly, it was only a weekend away. On Monday (March 14), poly surpassed CNOOC real estate and China Resources Land listed in Hong Kong stocks.
Affected by the overall market, both A-share and Hong Kong stock real estate sectors fell throughout the day, and individual stocks generally fell. As of the close, the A-share real estate development sector fell by 2.08%, and the real estate sector in Hong Kong stock fell by 9.25%.
Three of the “Zhaobao Wanjin” real estate enterprises in the head of A-Shares fell, of which Vanke fell 3.36%, Gemdale Corporation(600383) fell 1.85%, and China Merchants Shekou Industrial Zone Holdings Co.Ltd(001979) fell 0.14%. Poly Developments And Holdings Group Co.Ltd(600048) is still strong with a rise of 90% in the past six months. After opening low, it once soared by more than 5%. After that, it fell all the way under the coercion of the market, but it still recorded an increase of 0.68% at the close, and the gap with Vanke’s market value has widened to more than 10 billion.
Real estate stocks in the Hong Kong stock market can be described as a howl. 15 stocks fell by more than 10%, including Zhengrong real estate, Shimao Group, jiazhaoye, Rongxin China, China Olympic Park, Longguang group, etc. One of the characteristics of the decline on the 14th was that private real estate enterprises with a relatively small decline in the early stage killed more severely. Lvjing China fell by more than 24%, rongchuang China and Xuhui holding group fell by about 20%, universe real estate enterprise country garden fell by 18.88%, and the market value fell below HK $100 billion, a five-year low. However, China Evergrande, a flat house enterprise that can not fall, fell only 6%, which is better than more than 3% of the sector index.
The decline of the two central enterprises listed in Hong Kong, China Overseas Development and China Resources Land, was significantly smaller, but they also reached 4.65% and 5.89% respectively. The market value of both evaporated more than HK $10 billion, closing at HK $235.9 billion and HK $239.2 billion, about RMB 191.6 billion and 194.4 billion at the latest exchange rate, a slight gap of 4 billion and 1.2 billion compared with Poly Developments And Holdings Group Co.Ltd(600048) closing market value of 19.6 billion, respectively.
In this way, Poly Developments And Holdings Group Co.Ltd(600048) took two days to counter attack the three head peers and ascend to the top of the market value of China’s real estate enterprises.
“universal real estate enterprise” country garden fell to the seventh
According to the 2021 annual sales data ranking of Kerui, a third-party real estate research institution, Poly Developments And Holdings Group Co.Ltd(600048) whether in full caliber or equity caliber, only ranks fourth in the industry, while CNOOC real estate and China Resources Land Rank sixth and eighth respectively. There is no doubt that country garden, the “universal real estate enterprise”, has the largest sales scale. Its full caliber sales amount (contract sales) has reached 758.82 billion yuan, 40% higher than poly and more than twice as high as CNOOC and China Resources.
However, the market value is completely different.
Country garden has continued to fall for five trading days recently, with a cumulative decline of 35% after accelerating the decline on Monday. At present, the market value has shrunk to 79.1 billion from 171.1 billion the previous year, down 54% a year, and the market value ranks only seventh among the leading real estate enterprises.
For the market value and ranking changes of representative real estate enterprises, the fund gentleman made a table as follows:
As can be seen from the table, compared with a year ago, only four real estate enterprises have increased in market value, namely poly, China shipping, China Merchants and Jindi. All of them are state-owned real estate enterprises, and their ranking has increased by 3, 2, 4 and 5 respectively. The market value ranking is far better than that of sales scale. Although the market value of China Resources, which ranks second in the industry, has shrunk, it is only less than 10%, so the ranking has also increased.
Vanke is the only real estate enterprise with state-owned assets to decline in the ranking. It fell from the first to the fourth in the previous year, and its market value evaporated by nearly 50% in one year. The market value ranking of private real estate enterprises fell to varying degrees. There was only one Longhu group in the top five, but the ranking also fell to fifth from second in the previous year. Evergrande’s market value fell by more than 90% in one year, leaving only 14.8 billion yuan, down nine places.
real estate industry comes to a crossroads
According to the latest research article released by Yu Xiaoyu and Wang Ling, researchers of Yihan think tank, the current real estate industry has entered a crossroads, “whether to move left or right, not everyone may have a clear understanding, confused or helpless, or still occupy the mainstream”.
Yihan think tank believes that central enterprises and state-owned enterprises will probably grasp the initiative of industry development and guide the industry to a new stage in the future, but the opportunities are not universal. Having advantages does not mean that they can seize the opportunities, let alone the end. Whether they can seize them or how to seize them still needs to be seen later. For private enterprises, the logic is similar, and stable private enterprises also have certain advantages. If there are no major mistakes or external Black Swan events, enterprises may also enjoy certain dividends when the market starts to pick up.
For enterprises that have been out of danger, there may be two in the end. One is that they fail to save themselves, or directly withdraw, or become a subsidiary of central enterprises and state-owned enterprises; The other is that self-help is effective, but it takes a lot of energy. When self-help is completed, its scale will be relatively limited, and the free space will be reserved for other enterprises.
China Merchants Securities Co.Ltd(600999) Zhao Ke’s team combed the logic of future real estate stock investment, and believed that “the improvement of the competition pattern of medium and long-term development business” and “the trouble of happiness in the M & a market” were two key points.
The improvement of competition pattern is reflected in two aspects: one is long and the other is short:
First, the moat of “spread creation” and “turnover acceleration” of national layout real estate enterprises has been formed. With the clearing of the business model of “leveraging, gambling and value-added”, the number of market participants will decrease. Although regional companies will still have new entrants one after another, real estate enterprises with national layout advantages will form a moat of “spread creation” and “turnover acceleration”, It is reflected in “product positioning and land acquisition capacity under urban deep cultivation” and “turnover capacity driven by interest free liabilities”;
Second, the “first hand effect” of the “leftovers”. In the past, some real estate enterprises passively deleveraged due to special events, but “blessing in disguise”, and the future logic is that “adhering to the original intention is victory”. At present, with the improvement of the profit margin of available land resources, the opportunity will be left to those who are prepared, and the real estate enterprises that adhere to the steady cash flow will first capture the opportunity given by this market. At the same time, the rest usually have the original intention of “brand effect” and “property service ability”, which will consolidate the further acquisition and decentralization of resources.
In terms of M & A, Zhao Ke’s team said that the equity M & A of cooperative projects has begun. From overseas research, when the cycle hits the bottom and rebounds, the consideration of more incremental M & A will be gradually met and reached. M & A may be one of the main logic of industry growth in the next 2-3 years, including real estate development and industrial chain (property and suppliers).
Based on the above logic, it is suggested to continue to pay attention to “Zhaobao Wanjin Zhonghua dragon” ( China Merchants Shekou Industrial Zone Holdings Co.Ltd(001979) , Poly Developments And Holdings Group Co.Ltd(600048) , China Vanke Co.Ltd(000002) , Gemdale Corporation(600383) , China overseas development, China Resources Land, Longhu group), and those with marginal changes: Yuexiu, Greentown, Oct, etccenter>
