Current investment tips:
Financing policy cycle: a variety of financing tools emerge one after another, and financing regulation ideas need to be changed. We reviewed the previous financing cycle and concluded that: 1) 200508: mainly development loans; 2) In 200810, ah’s equity financing was large-scale, and the part after non-standard blowout was standardized; 3) 201114: A-share equity financing stagnated, and overseas debt and non-standard gradually rose; 4) 201416: the issuance of A-Shares was restarted, and domestic bonds broke out in an all-round way; 5) 201721: the amount of H-share equity financing was stable, and the amount of overseas bonds began to increase. It is found that: 1) the financing cycle presents the law of 3-4-year cycle, and the debt cycle is the leading force behind it; 2) The diversity of on balance sheet and off balance sheet financing instruments is increasing, and the leading financing instruments in each round are constantly changing; 3) In the past, the financing regulation idea was “short-term, total quantification, focusing on blocking and supplemented by dredging”. The law of this round of financing cycle has changed, the leverage ratio has decreased, but the risk is increasing. Especially after 2021, the market-oriented and non market-oriented exit of various financing instruments has promoted and exacerbated the fund dilemma of the industry. At present, the financing cycle has reached a critical point, and the thinking of financing regulation needs to be changed.
This round of cycle constraints: policies at both ends of supply and demand need to be repaired, and financing policies should focus on making efforts. There are many similarities between this cycle and the bottom of each previous economic cycle. At present, it is more similar to 2008 and 2014. It is mainly reflected in the weakening of real estate Fundamentals (continued decline in sales, construction and investment) and the drag on the economy (decline in GDP growth), while all aspects of the macro economy are facing downward pressure (export, consumption, local finance, etc.), and the severity of the macro environment may be higher than that in 2008 and 2014, Therefore, the policies at both ends of real estate supply and demand need to be repaired. There are also many differences between this cycle and the previous cycle, mainly reflected in the low inventory level, the low willingness of the main body to participate (real estate enterprises, financial institutions, home buyers) and many policy restrictions, which puts forward requirements for policy repair: 1) low inventory: to stabilize the economy, replenish inventory first, and supply first in policy repair; 2) Low willingness to participate: replenishing inventory needs to boost the willingness of the main body to participate, as well as the willingness of real estate enterprises, financial institutions and buyers to participate; 3) Focus on structural policies to promote the virtuous circle of regulation and control, and focus on the main contradictions of the industry.
Deduction of financing policy: long-term financing is the key to solving the problem, especially equity financing and REITs We believe that in order to solve the problems of weak willingness of multi participants and unstable long-term expectations, the extension of financing debt maturity is the key to solve the problem, which is mainly reflected in debt financing or equity financing and other instruments with long financing maturity. Specific financing policy suggestions: 1) relying on debt instruments in the short term, including M & A loans and perpetual bonds, but the simple and crude debt leverage under the constraints of the three red lines can not solve the long-term capital dilemma, but may worsen the original high-quality enterprise statements; 2) Relying on equity instruments, equity financing and commercial real estate REITs for a long time and giving some channels to increase capital for some high-quality enterprises can effectively alleviate the leverage problem and promote them to merge and restructure the enterprises in danger. In addition, the basic assets of subsequent REITs may also be extended.
Moreover, the current round of industry adversity has greatly promoted the clearing of supply. The remaining real estate enterprises are basically state-owned enterprises, central enterprises and high-quality private enterprises. The follow-up equity and debt policy support may encourage the expansion willingness of high-quality real estate enterprises and the participation of financial institutions.
Investment analysis opinion: when the idea of financing regulation changes, long-term financing is the key to solve the problem and maintain the “optimistic” rating. After reviewing the past five rounds of financing cycles, we found that the financing cycle showed a 3-4-year cycle law, and the debt cycle was the leading force behind it.
The recent market-oriented and non market-oriented exit of various financing instruments has promoted and exacerbated the capital dilemma of the industry. At present, the financing cycle has reached a critical point. At the same time, in view of the three constraints of low inventory level, low willingness of subjects to participate and many policy restrictions, we believe that the extension of the term of financing debt is the key to the solution of this cycle, which is mainly reflected in long-term creditor’s rights or equity financing instruments, such as equity financing and commercial real estate REITs, so as to help the healthy and stable development and virtuous circle of the real estate industry and promote the optimization of the industry pattern, With the further improvement of concentration, 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) , Seazen Holdings Co.Ltd(601155) , Jinke Property Group Co.Ltd(000656) , China State Construction Engineering Corporation Limited(601668) , 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 regulation and control policy was tightened more than expected, the de commercialization of sales was less than expected, and the pilot strength of real estate tax was more than expected.
