Industry core view:
Under the macro background of “steady growth”, the fundamentals of the real estate industry continue to stay at the bottom, and the marginal improvement policy continues. It is expected that there are still many favorable policies to be expected in the follow-up, and continue to be optimistic about the market performance of the real estate sector. It is suggested to pay attention to (1) property management companies with good fundamental performance; (2) High quality real estate enterprises with financial stability and background of central enterprises / state-owned enterprises; (3) Real estate enterprises with high-quality holding properties or transformation enterprises, or effectively form a virtuous capital cycle of “development +”.
Key investment points:
Market review last week: under the joint voice of six ministries and commissions, the real estate index of Shenwan industry rose by 1.98% last week, the Shanghai and Shenzhen 300 index fell by 0.94%, and the real estate sector ranked first, with a significantly stronger performance than the market. Since 2022, the real estate industry has fallen by 3.75%, and the CSI 300 index has fallen by 13.65%, with significant relative gains.
Key policy highlights: (1) the financial stability and Development Commission of the State Council held a special meeting. The meeting proposed that with regard to macroeconomic operation, we must implement the decision and deployment of the Party Central Committee, earnestly revitalize the economy in the first quarter, actively respond to monetary policy, and maintain a moderate growth in new loans. 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. It is emphasized that relevant departments should earnestly assume their own responsibilities, actively introduce policies beneficial to the market and carefully introduce contractive policies; The CBRC, the central bank, the CSRC and the safe held meetings to convey the spirit of the meeting of the FSC; (2) The relevant person in charge of the Ministry of Finance said that considering all aspects of the situation, there are no conditions for expanding the pilot cities of real estate tax reform this year; (3) Liu Shijin, deputy director of the Economic Committee of the CPPCC National Committee and former deputy director of the development research center of the State Council, said that in the short term, monetary policy focuses on stabilizing real estate and fiscal policy focuses on stabilizing infrastructure. On the basis of reducing reserve requirements and guiding interest rates in the early stage, the structural orientation of monetary policy should provide necessary liquidity for the soft landing and medium and long-term stable development of real estate, and focus on supporting the demand for housing construction funds in the process of urbanization and structural transformation and upgrading; (4) The CSRC is working with relevant ministries and commissions to further promote the pilot of infrastructure REITs and promote a virtuous circle of investment and financing; (5) The loan interest rates of the first and second homes in Xiangyang and Shiyan were 40-45 BP lower than that in February.
Industry fundamentals: the decline in sales has expanded, and the performance of the land market is still weak. From March 7 to March 13, the sales of commercial houses in 30 large and medium-sized cities fell by 27.53% year-on-year, including 20.9% in the first line, 26.97% in the second line and 35.09% in the third line; The supply and construction area of residential land in Baicheng has decreased by 26.4% year-on-year, and the decline continues to narrow. Since the beginning of the year, it has decreased by 54.68% year-on-year, the transaction and construction area of residential land in Baicheng has decreased by 69.1% year-on-year, and the premium rate of residential land in Baicheng is 3.4%.
Dynamics of key companies: R & F real estate is facing liquidity difficulties in stages, and the “16 R & F 04” due on April 7 is expected to be unable to be repaid on time; Many companies released their performance in 2021, and property companies performed well. The revenue of China Merchants Property Operation & Service Co.Ltd(001914) , poly property and Jianye new life increased by 22.42%, 34.2% and 35.6% year-on-year respectively, and the net profit increased by 17.25%, 25.6% and 48.2% year-on-year respectively;
Risk factors: the strength of the policy is less than expected, the industry fundamentals continue to decline rapidly, and the credit risk is higher than expected
