Good sales performance under high base
From January to February, the sales area of commercial houses nationwide was – 9.6% year-on-year, 7.2pct narrower than 2021q4, significantly higher than the year-on-year growth rate of new house sales area in 63 cities in the same period – 30.14%; From January to February, the national sales amount of commercial housing was – 19.3% year-on-year, an increase of 0.62pct compared with 2021q4; From January to February, the average sales price of commercial housing in China was – 10.7% year-on-year, the lowest cumulative year-on-year growth rate since February 2000. Real estate enterprises continued to strengthen marketing, exchange price for quantity and strengthen sales collection. Sales from January to February are not afraid of the pressure of high base, which may benefit from the statement of stable expectations at the central level since the fourth quarter of last year, the continuous easing of mortgage strength and the potential improvement of local expectations due to the continuous upgrading of urban policies (the month on month growth rate of house prices in Baicheng has steadily increased from – 0.04% in November 21 to + 0.03% in February 22). We believe that the sustainability of sales recovery still faces the test of unstable industry expectations, and the follow-up performance depends on the continuity and follow-up of the supporting policy and the release rhythm of reasonable housing demand, especially the improvement demand.
Stock construction continues to support development investment
Before the trend improvement of industry sales was established, the industry’s incremental development investment remained cautious, and the stock construction investment supported the development investment to achieve a year-on-year increase of + 3.7%. Incremental end: 1) from January to February, the land purchase area was – 42.3% year-on-year, and the transaction price was – 26.7% year-on-year, with a year-on-year decline of 16.97 and 32.43 PCT compared with 2021q4; 2) New construction from January to February was – 12.2% year-on-year, with a decrease of 16.38pct compared with 2021q4. We believe that the improvement power is mainly due to the structural recovery of sales expectations. Stock side: 1) from January to February, the housing construction area increased by + 1.8% year-on-year. With the support of local completion guarantee and pre-sale fund supervision, stock construction is expected to support the development investment to maintain a stable range; 2) The completed area from January to February was – 9.8% year-on-year, with a decrease of 10.84pct compared with 2021q4, or it was mainly affected by the fluctuation of construction rhythm.
The financing pressure remains unabated, and the payment collection is facing a test
From January to February, the total value of capital sources for real estate development was – 17.7% year-on-year, with a year-on-year decrease of 5.2pct compared with 2021q4. Among them, 1) China’s loans fell by – 21.1% year-on-year, a slight improvement of 5.8pct compared with 2021q4. Since the beginning of the year, reasonable capital needs such as development loans and M & A loans have been further met, but the overall liquidity distribution is still relatively unbalanced when the industry’s credit risk preference is still low; 2) From January to February, the deposit and advance payment were – 27.0% year-on-year, and the year-on-year decline has expanded month by month since August 2021. From January to February, personal mortgage loans were – 16.9% year-on-year, down 17.7pct from 2021q4, reflecting that the current payment collection pressure is still large. At present, the refinancing ability of some private real estate enterprises is damaged, and the sales performance may become the most critical variable of cash flow.
Grasp the beta of loose policy structure and the alpha of M & A
Whether the quantitative change of industry data can lead to the qualitative change of policy remains to be further observed. The systematic relaxation of real estate regulation depends on the phased demands of steady growth on real estate at the industry fundamentals, credit and macro levels. With the formation of a new policy boundary between non speculation in housing and urban implementation, local policies are expected to play a greater role in a new round of underpinning cycle. Investment suggestion: the future industry beta depends on the adjustment of industry structure, the pace of capacity clearing and the strength of policy support; Alpha focuses on the repair of the balance sheet and profit margin of key real estate enterprises by M & A, the accuracy of countercyclical plus leverage, and the long-term excavation of the value of housing scenarios.
Continuous recommendation: 1) high quality leaders: Gemdale Corporation(600383) , Poly Developments And Holdings Group Co.Ltd(600048) , China Vanke Co.Ltd(000002) , Longhu group, China Merchants Shekou Industrial Zone Holdings Co.Ltd(001979) , etc; 2) High quality growth: Jinke Property Group Co.Ltd(000656) , Seazen Holdings Co.Ltd(601155) , Xuhui holding, etc; 3) Quality property management: Country Garden service, China Merchants Property Operation & Service Co.Ltd(001914) , poly property, Xuhui Yongsheng service, etc.
Risk warning: industry credit risk spread; The downward cycle of industry sales begins; Administrative regulation remained high-pressure, and the pilot strength of real estate tax exceeded expectations
