Matters:
The Bureau of statistics released real estate investment and sales data from January to February. Among them, the sales area of commercial housing was 157.03 million square meters, a year-on-year decrease of 9.6%; The sales volume of commercial housing was 1545.9 billion yuan, a year-on-year decrease of 19.3%; The investment in real estate development was 1449.9 billion yuan, a year-on-year increase of 3.7%. The new construction area of houses was 149670000 square meters, a year-on-year decrease of 12.2%; The completed housing area was 122 million square meters, a year-on-year decrease of 9.8%.
Guoxin real estate's view: 1) the performance of development investment completion is not poor, which is mainly supported by construction and installation investment. 2) The sales performance was better than expected, but the decline in the average sales price reflected that the market was still depressed, and the deviation of the top 100 data was affected by multiple factors. 3) The real picture behind the data: sales are recovering slowly, the investment structure is deteriorating, and the expectation of loose policy is difficult to shake. 4) Investment advice: we believe that as long as the land market does not pick up, the relaxation of policies will not stop, and relevant policies similar to those issued in Zhengzhou will follow in other regions. Therefore, we firmly believe that after the mood is stable, real estate stocks are still very worthy of investment. From the perspective of individual stocks, in the medium and short term, with the greater relaxation of policies in non restricted areas, the second tier leading real estate enterprises with more third and fourth tier cities will benefit more; In the medium and long term, with the withdrawal of the fast turnover mode from the historical stage and the repair of the long-term balance sheet of real estate enterprises, the leading real estate enterprises with stable operation and outstanding comprehensive strength will continue to benefit. Recommended Seazen Holdings Co.Ltd(601155) , Poly Developments And Holdings Group Co.Ltd(600048) , Gemdale Corporation(600383) . 5) Risk warning: the policy is tightened more than expected; Factors such as the epidemic caused the industry fundamentals to decline more than expected; The credit risk event of real estate enterprises exceeded the expected impact.
Comments:
The completed amount of development investment is not poor, which is mainly supported by construction and installation investment
According to the data of the Bureau of statistics, the industry seems to be in good condition, which is not consistent with the previous perception that the sales and land market is depressed and the cash flow of real estate enterprises is tight. Therefore, the release of the data triggered the panic and emotional catharsis of investors about the failure of the policy, which led to the sharp decline of the real estate sector and the heavy blow to the stock price. We believe that we should not question the authenticity of the data, but analyze it more rationally from a neutral point of view, and we can see the deep reasons why the data exceeds expectations or deviates from expectations.
First of all, the performance of development investment is not poor, which is in line with our judgment of + 2% for the whole year of 2022. The main reason is the support of construction and installation investment. From January to February 2022, the completed investment in real estate development was 1449.9 billion yuan, an increase of 3.7% year-on-year on the basis of the high base in the same period last year, a decrease of 0.7 percentage points compared with the whole year of 2021, but an increase of 17.6 percentage points compared with the single month in December 2021.
Looking back on history, construction and installation investment is the leading indicator of completion, accounting for more than 60% of the total development investment, reflecting the money spent by real estate enterprises on construction and materials. The growth rate of Jian'an investment continued to rise after becoming positive in February 2019 and began to fall after reaching the peak last year, reflecting the construction obligations corresponding to the last round of real estate sales peak. The growth rate fell this year, but it is expected to be about 3%. At the same time, affected by the credit event and sales downturn in the second half of last year, some construction tasks will be delayed until this year, especially in the first quarter, so the growth rate of construction and installation in the first quarter may be even higher than the level of 3% in the whole year. Although the market performance of land purchase is not very good, the proportion is relatively low after all, and the drag effect is not obvious.
As for the seemingly contradictory deviation between the positive growth of Jian'an and the negative growth of cement production, the main reason is that the current peak demand for cement in real estate has passed. From the perspective of the construction process, cement and reinforcement are only a part of the construction and installation, and are concentrated in the middle of the project construction, and more in the later stage are glass, coating, elevator, etc. In addition, cement is also affected by other industries, such as infrastructure construction. The investment in construction and installation increased by 8.6% in 2021, but the cement output was - 1.2% year-on-year. It can be seen that the two are not completely synchronized. Similarly, excavators are mainly used to dig foundation pits in the construction stage, which is more related to new construction than construction and installation investment.
The sales performance was better than expected, but the decline in the average sales price reflected that the market was still depressed, and the deviation of the top 100 data was affected by multiple factors
Real estate sales performed better than market expectations. From January to February 2022, the cumulative sales area of commercial housing was 157.03 million m2, with a year-on-year increase of - 9.6%, a decrease of 11.5 percentage points compared with the whole year of 2021, but an increase of 6.1 percentage points compared with the single month in December 2021; The cumulative sales of commercial housing was 1545.9 billion yuan, a year-on-year decrease of - 19.3%, 24.1 percentage points lower than that of the whole year of 2021, but only 1.5 percentage points lower than that of a single month in December 2021. According to the decrease of 10% in sales area and 20% in sales, we can calculate that the average sales price has decreased by 10%. As the recovery degree of the third and fourth tier is not as good as that of the first and second tier, the decline of the average sales price is not caused by structural factors, but more reflects the price reduction and sales behavior of real estate enterprises, and the market is still depressed.
The sales data of the Bureau of statistics is significantly higher than that of the top 100 real estate enterprises of Kerui, with a year-on-year sales of - 43%. We believe that there are two main reasons for this deviation: (1) the definition of sales of the top 100 real estate enterprises is different from that of the Bureau of statistics. The data of the Bureau of statistics is filled in by the project company, subject to the contract data of the project, but the data disclosed by the real estate enterprises themselves is not strict; (2) In the past, there was water injection in the list. This is because financial institutions usually refer to the sales list when investing in real estate enterprises. Therefore, real estate enterprises are willing to invest in large-scale expansion when they are eager for financing and land acquisition. Especially from January to February last year, the sales and land market were hot. Now most real estate enterprises have no ability to expand investment and the need to inject water in the list, Therefore, it is normal for the top 100 data to decline beyond the actual. We believe that the actual sales situation of the whole market should be between the Bureau of statistics and the top 100, that is, a decrease of about 30%.
The real picture behind the data: sales are recovering slowly, the investment structure is deteriorating, and the expectation of loose policy is difficult to shake
In fact, we believe that we should rationally look at the so-called deviation between the data of the Bureau of statistics and the prosperity perceived by the market: on the one hand, the data of the Bureau of statistics is not as good as it seems. The bright eyes of investment depend on Jian'an rather than land acquisition, which shows the afterglow of the last cycle rather than the dawn of the new cycle, On the contrary, it shows that the vast majority of the funds of real estate enterprises need to be used to complete the house delivery obligations to house buyers, and the land market will inevitably continue to be deserted; On the other hand, the fundamentals of the industry may not be as bad as expected. In the grass-roots research carried out in mid February, we can also see that the sales market is slowly but clearly warming up after the mortgage relaxation and the decline of interest rate last year. The difficulties of some enterprises with too high leverage and excessive dependence on pre-sale repayment can not represent the whole industry.
We believe that the current industry picture is: (1) sales are recovering slowly, but it is not good enough for real estate enterprises to be optimistic about land acquisition. The performance of the land market continues to be depressed. From January to February 2022, the cumulative transaction area of residential land in 300 cities was 73.87 million square meters, a year-on-year increase of - 64%; In February 2022, the transaction premium rate of residential land in 300 cities in the current month was 4.3%, which remained at a low level; (2) This year's investment will not break the cliff, and may even be growing, but the investment structure is deteriorating. More land is used for construction and less money is used for land acquisition. Next year's investment performance will be very poor.
Real estate enterprises are indeed depressed now, and the real estate chain is facing greater pressure. At present, the completion is at the end of a strong crossbow. The completed area of houses from January to February 2022 is 122 million square meters, a year-on-year decrease of 9.8%, a decrease of 21 percentage points compared with the whole year of 2021; Due to the insufficient land stock and the failure to completely reverse the sales expectation, the construction will continue to be weak. From January to February 2022, the new construction area of houses was 149670000 square meters, a year-on-year decrease of 12.2%, a decrease of 0.8 percentage points compared with the whole year of 2021.
Based on this, we believe that compared with the quality of tangled sales and investment data, the heat of the land market is more meaningful, especially for local governments, which is why we believe that relevant policies will continue to be loose and will not be tightened because the data is good.
Investment suggestions:
Based on the above analysis, the real estate data released by the Bureau of statistics is not as good as it seems. The investment structure is deteriorating and the sales recovery is very slow. We believe that as long as the land market does not recover, the policy relaxation will not stop. Similar policies issued by Zhengzhou will follow in other regions. Therefore, we firmly believe that after the mood is stable, Real estate stocks are still very worthy of investment. From the perspective of individual stocks, in the medium and short term, with the greater relaxation of policies in non restricted areas, the second tier leading real estate enterprises with more third and fourth tier cities will benefit more; In the medium and long term, with the withdrawal of the fast turnover mode from the historical stage and the repair of the long-term balance sheet of real estate enterprises, the leading real estate enterprises with stable operation and outstanding comprehensive strength will continue to benefit. Recommended Seazen Holdings Co.Ltd(601155) , Poly Developments And Holdings Group Co.Ltd(600048) , Gemdale Corporation(600383) .
Risk tips:
1. The policy was tightened more than expected; 2. Factors such as the epidemic caused the industry fundamentals to decline more than expected; 3. The credit risk event of real estate enterprises exceeded the expected impact.
