Key investment points
Since 2000, it has mainly experienced four rounds of real estate loose regulation cycles, including demand side, supply side and financial side. From the four rounds of steady growth cycle experienced by real estate since 2000, 2008 and 14 are two typical real estate relaxation cycles, and the central government has made strong efforts in the policy relaxation stage; In the 11-year and 18-year cycles, the policies are more for the central government to reduce the reserve requirement and some local provinces and cities to relax the provident fund limit and cancel the purchase restriction, with relatively small efforts. After 16 years, “housing, housing and non speculation” has become the main tone of the policy. The overall policy is tight, and the national substantial relaxation will no longer appear. Due to the implementation of urban policies, local fine-tuning of policies is the main policy.
The evolution of each round of real estate cycle will go through the process of downward fundamentals → policy relaxation → fundamental improvement → policy tightening. In the first step, the decline of fundamentals is first reflected in the deterioration of real estate data, including the deterioration of sales, financing and investment data; Second, the central government set the tone first, relaxed and released Programmatic Policies, and then entered the intensive policy period; The third step is to improve the fundamental data of the real estate industry; Fourth, with the steady growth effect fulfilled, the policy began to turn to tightening, and a round of real estate cycle ended.
The current sector market is mainly affected by policy expectations. The policy easing stage has excess returns compared with the market. The market usually starts from policy relaxation and ends when the policy is tightened or the expected falsification is expected. The range increase is related to the intensity of policy easing. Reviewing the historical data, we can see that 1) in 2008 and 2014, the central real estate policy was greatly relaxed. In 200809, the sector market continued for 14 months, and the maximum excess return in the range reached 70%; From 2014 to 2016, the sector Market lasted for 22 months, and the maximum excess return in the range reached 88%; 2) 11 and 18 years: the central government’s real estate policy is relatively weak, and the market performance is relatively weak. The maximum excess return in 11 and 18 years is 24% and 12% respectively. In 18 years, the fundamentals are repaired, the expected falsification is verified, the superposition policy regulation is stricter, and the subsequent market continues to decline.
The real estate market of state-owned enterprises has closely followed the changes of the basic policies of state-owned enterprises and private enterprises in the medium term. Taking 10 central state-owned enterprises as samples, this round of real estate sector market bottomed in July 21 and started in August. As of March 11, 22, the range excess return was 43%, lasting for nearly 8 months. From the perspective of the central and local monetary policies, the current level of adjustment is closer to that of the central and local monetary policies in 2008, which is second only to that of the central and local monetary policies in 2008. We believe that due to the changes in the macroeconomic environment, real estate is no longer a means to stimulate the economy. It is difficult to relax the follow-up policies in 2008 and 14 years, and the performance of the secondary market is difficult to exceed the increase at that time. The current round of real estate market has been deduced to the medium term (fundamentals continue to bottom + policy intensive investment). We should closely track the dynamic relationship between fundamentals and policies. When the fundamentals confirm that the inflection point begins to improve, the policy intensive investment period ends, the market will enter the later stage, and the profit taking in the early stage should begin to cash in profits in batches.
Investment suggestion: the current round of real estate market has been deduced to the medium term and still has a certain sustainability. The industry is currently facing the dual problem of “sluggish sales + liquidity of real estate enterprises”. It is expected that there will be greater policy support in the future, and the intensive launch period of the policy has not ended. When selecting individual stocks, companies with stable operation, long-term value and safety margin should be selected, with key recommendations: Hangzhou Binjiang Real Estate Group Co.Ltd(002244) , Poly Developments And Holdings Group Co.Ltd(600048) , China Resources Land, Vanke A, China Construction Development International Group, Xuhui holding, Oct a, etc.
Risk tips: project delivery risk, project sales collection risk, industry policy regulation risk.
