Event:
On March 16, the financial stability and Development Commission of the State Council held a special meeting to study the current economic situation and capital market problems. The meeting pointed out that with regard to real estate enterprises, it is necessary to timely study and put forward effective risk prevention and resolution solutions, and put forward supporting measures for the transformation to a new development model. The meeting stressed that relevant departments should earnestly assume their responsibilities, actively introduce policies conducive to the market and prudently introduce contractionary policies.
We should respond to the hot issues concerned by the market in a timely manner. All policies that have a significant impact on the capital market should be coordinated with the financial management department in advance to maintain the stability and consistency of policy expectations. The financial commission of the State Council will strengthen coordination and communication according to the requirements of the Party Central Committee and the State Council, and hold accountable when necessary.
On March 16, the CBRC held a special meeting to convey, study and implement the spirit of the meeting of the financial commission of the State Council, and guide banking and insurance institutions to proceed from the overall situation and firmly support the development of the real economy. We should adhere to the positioning that houses are used for living rather than speculation, continue to improve the long-term mechanism of "stabilizing land prices, house prices and expectations", actively promote the transformation of the development mode of the real estate industry, encourage institutions to carry out M & A loans in a stable and orderly manner, focus on supporting high-quality real estate enterprises and acquiring high-quality projects of difficult real estate enterprises, and promote the virtuous circle and healthy development of the real estate industry.
On March 16, Comrade Yi Gang, President of the people's Bank of China and director of the office of the financial commission, presided over a meeting of cadres at or above the department level at noon on March 16 to convey and study the spirit of the 51st special meeting of the financial commission of the State Council and study and deploy the implementation work of the people's Bank of China. Adhere to seeking progress while maintaining stability, prevent and resolve risks in the real estate market, steadily promote and complete the rectification of large platform companies as soon as possible, promote the healthy and stable development of platform economy and improve international competitiveness. We will further strengthen inter departmental policy coordination, respond to hot issues of market concern in a timely manner, stabilize expectations, boost confidence, maintain the steady and healthy development of China's economy, and jointly safeguard the stable development of the capital market.
Comments:
The financial Commission stressed that it is urgent to stabilize real estate under the stable economy by putting forward effective risk prevention and resolution solutions for real estate enterprises. On March 16, the Finance Committee held a special meeting and pointed out that "relevant departments should earnestly assume their responsibilities and actively introduce policies conducive to the market. The Finance Committee of the State Council will strengthen coordination and communication according to the requirements of the Party Central Committee and the State Council, and be accountable when necessary". In addition, in terms of real estate, the meeting pointed out that "with regard to real estate enterprises, we should timely study and put forward effective risk prevention and resolution solutions, and put forward supporting measures for the transformation to a new development model". We believe that: 1) at present, the plight of the real estate industry needs active improvement of policies. After the central government's statement, the follow-up policies can be implemented continuously; 2) For the first time, it is emphasized to put forward effective risk resolution solutions for real estate enterprises. Since September 2021, the central government has basically emphasized "safeguarding the legitimate rights and interests of housing consumers and meeting the reasonable housing needs of home buyers", "the risks of the real estate market are generally controllable, the reasonable capital needs are being met, and the overall trend of the healthy development of the real estate market will not change". In the past, we believed that housing enterprises should pay more attention to preventing and controlling the risks of housing purchase and delivery; Now, more emphasis is placed on preventing the risks of real estate enterprises, and it is required to timely study and put forward effective risk prevention and resolution response plans, and the follow-up risk prevention policies may be worth looking forward to.
The China Banking and Insurance Regulatory Commission and the central bank stated their position to prevent and resolve risks in the real estate market and focus on supporting high-quality real estate enterprises with difficulties in mergers and acquisitions. Immediately after the special meeting of the financial commission, the CBRC and the central bank made positive statements respectively: on March 16, the CBRC said that "we should adhere to the positioning that houses are used for living, not for speculation, and continue to improve" stabilize land prices, house prices Stabilize the expectation of "a long-term mechanism for real estate, actively promote the transformation of the development mode of the real estate industry, encourage institutions to carry out M & A loans in a stable and orderly manner, focus on supporting high-quality real estate enterprises to merge and acquire high-quality projects of difficult real estate enterprises, and promote the virtuous circle and healthy development of the real estate industry"; On March 16, the central bank said that "we should make progress while maintaining stability, prevent and resolve risks in the real estate market... Further strengthen inter departmental policy coordination, respond to hot issues concerned by the market in a timely manner, stabilize expectations, boost confidence, maintain the steady and healthy development of China's economy and jointly maintain the stable development of the capital market." At present, the downward pressure on the fundamentals of the real estate industry still exists, and the financial difficulties of the industry are still intensifying. It is very important to prevent and resolve the risks of the real estate market. In the subsequent resolution process, with the further deepening of mergers and acquisitions, we believe that the liquidation of the real estate industry will be further presented, the industry concentration will be further improved, and high-quality real estate enterprises will usher in new development opportunities of both quantity and quality.
Investment analysis opinion: the three ministries and commissions actively stated that they would maintain stability, be wary of risk response plans and maintain a "optimistic" rating. Real estate is still the pillar industry of China's national economy, and the contribution of the industry itself and the industrial chain to GDP accounts for nearly 30%. However, under the current multiple regulation and financial difficulties, the impact on the economy may gradually enter the low drag stage. In view of the recent frequent voices of the government emphasizing stabilizing the economy, steady growth and preventing and controlling financial risks, while stabilizing the economy urgently needs to stabilize the real estate, it is expected that the policy repair at both ends of supply and demand of the real estate industry is expected to accelerate, and will promote the optimization of the industry pattern and further enhance the concentration, and the high-quality real estate enterprises are expected to usher in both quantity and quality. We maintain the "optimistic" rating of the real estate sector. Recommendations: A shares: Poly Developments And Holdings Group Co.Ltd(600048) , Gemdale Corporation(600383) , Xiamen C&D Inc(600153) , China Merchants Shekou Industrial Zone Holdings Co.Ltd(001979) , China State Construction Engineering Corporation Limited(601668) , Seazen Holdings Co.Ltd(601155) , Jinke Property Group Co.Ltd(000656) , China Vanke Co.Ltd(000002) ; H shares: China Resources Land, China overseas development, Longhu group, Xuhui holdings, country garden; And maintain the "optimistic" rating of the property management sector, and recommend: Country Garden service, Xuhui Yongsheng service, China Resources Vientiane, poly property, CNOOC property, New Dazheng Property Group Co.Ltd(002968) , Greentown service, Baolong business and xinchengyue service.
Risk tip: the real estate policy will be tightened again, the real estate tax will be piloted, the sales and financing funds will be tightened again, and the restricted proportion will be increased again.
