Core view
The Bureau of Statistics announced the operation of the real estate market from January to February 2022. The sales area, sales amount, investment amount and new construction area of real estate were 157.03 million square meters / 1545.9 billion yuan / 1449.9 billion yuan / 149.67 million square meters respectively, with a year-on-year growth rate of – 9.6% / – 19.3% / 3.7% / – 12.2% respectively, and the previous value was – 15.6% / – 17.8% / – 13.9% / – 31.2%.
The sales volume and price fell together and did not improve, and the actual demand is still weak. From January to February, the average sales price was 9845 yuan / m2, down 10.7% year-on-year and up 3.5% month on month. From January to February, real estate sales continued the decline since the second half of last year. The month on month recovery of average sales price is related to the tightening of sales discounts by real estate enterprises after the beginning of the year. Although the decline in sales area at the data level has narrowed, the area of commercial housing for sale has increased significantly, indicating a rising trend in inventory. From the perspective of comprehensive volume and price level, the current demand side is still weak, and the actual situation of the market may be more severe than that reflected by the data. The substantive recovery on the demand side still needs further stimulation by policies, and the sustainability of the rebound needs to be verified.
New construction continued to decline. The ratio of newly started area / sales area from January to February is 0.95, compared with the previous value of 1.11. New construction continued to decline. We believe that the main reasons are as follows: first, weak sales, lack of enterprise confidence and insufficient power to replenish inventory; Secondly, the land transfer area in 2020 and 2021 decreased by 1.1% and 15.5% respectively. In addition, affected by the centralized land supply and the epidemic, the land transfer area continued to decline by 42.3% from January to February 2022. The insufficient land storage of enterprises had a negative impact on the subsequent new construction; Under the pressure of ensuring delivery, completion also has a certain crowding out effect on new construction.
The capital of real estate enterprises is still severe, and there is great pressure on loan financing and sales collection. From the perspective of capital, from January to February, the capital in place of real estate enterprises was 2514.3 billion, with a year-on-year growth rate of – 17.7% and the previous value of – 19.3%, which improved slightly, but the capital pressure is still great. In terms of sub items, China’s loan financing was 410.5 billion, with a year-on-year growth rate of – 21.1% and the previous value of – 31.6%, narrowing the decline. On the demand side, deposits and advance receipts were 802.7 billion yuan, with a year-on-year growth rate of – 27.0%, the former value of – 25.9%, and personal mortgage loans were 412.4 billion yuan, with a year-on-year growth rate of – 28.5%, the former value of – 16.9%, indicating that the sales momentum is still declining, of which the decline of personal mortgage loans is even greater. Although the current bank credit environment has been much relaxed, the lack of consumer confidence still continues to affect the demand for credit at the residential end.
The industry concentration is still declining, and the sales of the top 100 real estate enterprises are weaker than the industry average. From January to February 2022, the year-on-year growth rates of the sales amount of top 10, top 10-20, top 20-50 and top 50-100 real estate enterprises were – 41.9%, – 49.3%, – 44.8% and – 38.1% respectively. From January to February, the sales concentration of top20 decreased to 36.8%.
Investment proposal and investment object
Various statistical indicators of the real estate industry continued to decline this month. Although the industrial policy has been relaxed since November last year, the marginal improvement of the actual fundamentals of the industry is very limited. From the perspective of capital, the financing of enterprises has only improved slightly, while the prepayment and mortgage of the residential sector continue to decline, which shows that the current confidence on the demand side is still weak. Considering the current credit environment of the industry and the downward inertia of the market, we believe that the current policy environment is still insufficient to reverse the confidence of consumers and restore the credit level of private real estate enterprises. Therefore, the weakening pressure on both sides of supply and demand still exists, The expectation of policy correction still exists. Before the data becomes clearer, there may be policy uncertainty. We think it is still not a good strategy to find marginal real estate enterprises at this stage. We continue to recommend the combination of state-owned enterprises and high credit private enterprises. We are optimistic about the first-line leaders with stable performance, and recommend Poly Real Estate ( Poly Developments And Holdings Group Co.Ltd(600048) , buy) and Vanke A ( China Vanke Co.Ltd(000002) , buy); Second tier leaders with flexible performance are recommended Gemdale Corporation(600383) ( Gemdale Corporation(600383) , buy), Longhu group (00960, buy), Xuhui holding group (00884, buy). At the same time, we are optimistic about the property management and business management industries with rapid growth and strong consumption attributes. We recommend Country Garden Service (06098, buy), poly property (06049, buy), China Merchants Property Operation & Service Co.Ltd(001914) ( China Merchants Property Operation & Service Co.Ltd(001914) , overweight), New Dazheng Property Group Co.Ltd(002968) ( New Dazheng Property Group Co.Ltd(002968) , buy), rongchuang service (01516, buy), Xingsheng Commerce (06668, buy).
Risk tips
Sales were significantly lower than expected. The intensity of policy regulation exceeded expectations. There is uncertainty in the financing environment.
