Talk every Monday: the sales market recovered in December and the bottom of the market was gradually consolidated: the sales market maintained negative growth in December but did not go down further, the market entered the bottom building period, the sales rebound in the first tier cities ended and fell again, and the markets in the second and third tier cities entered the rebound channel; From the perspective of real estate enterprises, although the year-on-year growth rate is still weak, the overall sales of the top 50 real estate enterprises in December improved significantly compared with December.
The sales of commercial housing market in the first tier cities fell compared with last month, and the sales performance of the second and third tier cities improved. According to the transaction data of 26 cities monitored by Kerui in December, the year-on-year growth rate of transaction area in first tier cities has decreased by – 46%, and the month on month growth rate is – 18%, which is significantly lower than that in the previous month. The year-on-year growth rate of sales in second and third tier cities in December was – 28% and 27% month on month. The year-on-year growth rate was still low, but the month on month data increased by 29 percentage points compared with last month.
According to the city by city data, the month on month liquidity of cities generally improved significantly in December, and the performance of real estate enterprises at the end of the month was good. In December, the year-on-year transaction volume of the four first tier cities in Beijing, Shanghai, Guangzhou and Shenzhen showed negative growth, and the second and third tier cities showed good month on month growth. Among the 22 cities, only Dalian (- 11%), Lhasa (- 1%), Ningbo (- 1%) and Xi’an (- 16%) had negative month on month growth, with an overall month on month growth of 27%. The sales strength of real estate enterprises at the end of the year was strong, which promoted the market recovery.
The market recovery still needs time, but the bottom has been basically consolidated. The year-on-year and month on month growth of sales area in first tier cities fell again, and the second and third tier cities continued to rise. We believe that on the one hand, we have received the impact of lagging data statistics at the end of the year, on the other hand, the recovery momentum of the market has not been fully opened. However, from the monthly overall sales market performance, the market did not accelerate the downward trend, but showed the form of bottom shock and upward trend. Without the expectation of further overweight in the policy, we believe that the bottom of the market has been basically clear.
According to the statistics of the top 50 real estate enterprises, the sales of real estate enterprises remained weak in December, but it was significantly better than that in November. The average year-on-year growth rate of the top 50 accumulated sales of real estate enterprises in December was – 34%, narrowed by 6 percentage points compared with the year-on-year negative growth of the previous month, and the month on month growth rate in December was 122%, which achieved certain results compared with the sales promotion of real estate enterprises in November.
Real estate enterprises in the land market are divided in land acquisition to guide the changes of industry pattern in the future. Greenland, rongchuang and Shimao, which once ranked among the top in sales scale, have entered the middle and rear of the top 50 real estate enterprises, while several relatively stable real estate enterprises such as Lvcheng, Zhuoyue, Binjiang, Jianfa, Longhu and Yuexiu have shown their willingness to actively expand. We are optimistic about the real estate enterprises that will maintain high land acquisition intensity in 2021. Among them, Lvcheng, Binjiang and Jianfa are quality real estate enterprises. Lvcheng and Jianfa have their own national central enterprise background and are expected to occupy a higher share in the future. For real estate enterprises with weak land acquisition intensity, they should also pay attention to prevent potential risk events.
Data tracking (December 27-january 2): due to the impact of the new year, some data have changed significantly. The new housing market: the transaction area of 30 cities is – 15 PCT and + 6 PCT in one week and cumulative year-on-year respectively, first tier cities – 21 PCT, + 16 PCT, second tier cities + 4 PCT, + 15 PCT, third tier cities – 40 PCT and – 14 PCT.
Second hand housing market: the transaction area of second-hand housing in 14 cities is – 5 pct year-on-year in a single week and – 5 pct year-on-year in total.
Land market: the cumulative construction area of land supply in 100 cities is – 88 PCT year-on-year, the cumulative construction area of transaction is – 88 PCT year-on-year, the cumulative transaction amount is – 95 PCT year-on-year, and the land transaction premium rate is 9%.
City Market: Beijing (+ 61 PCT), Shanghai (- 1 PCT), Guangzhou (- 13 PCT), Shenzhen (+ 68 PCT), Hangzhou (+ 34 PCT), Wuhan (- 46 PCT), Nanjing (- 8 PCT).
Investment strategy: it is suggested to pay attention to the leading real estate enterprises Poly Developments And Holdings Group Co.Ltd(600048) , China Vanke Co.Ltd(000002) and Longhu group with stable operation and good credit background. Focus on high-quality real estate enterprises Hangzhou Binjiang Real Estate Group Co.Ltd(002244) and Greentown China under the product-oriented logic.
Risk tip: the sales market accelerated downward, and the policy exceeded the expected regulation.
(Shengang securities)
