Sales: continued downturn, waiting for the industry to pick up: from January to February 2022, the sales area of commercial housing was 157.03 million square meters, a year-on-year decrease of 9.6%, and the monthly decline was 6.1% lower than that in December 2021. The sales volume was 1545.9 billion yuan, a year-on-year decrease of 19.3%, and the decline was 1.5% higher than that in December. Although the decline was narrowed from January to February, considering the transfer of some sales from December to January, the sales from January to February remained in a continuous downturn and did not improve significantly. The national average sales price of commercial housing is 10141 yuan / Ping. At present, the price has been in the process of continuous bottoming and recovery. Market confidence is still recovering, and it will take some time for policies to boost sales.
Investment: the cost of land purchase drives the growth of investment, and the new construction continues to be depressed: the completed investment in real estate development from January to February was 1449.9 billion yuan, an increase of 3.7% year-on-year, reversing the year-on-year downward trend since September last year. The construction area is subject to the recent three guarantees policy of the industry, “ensuring the delivery of buildings, ensuring the people’s livelihood and ensuring stability”, with a year-on-year increase of 1.8%. From January to February, the land purchase cost was 341.7 billion yuan, an increase of 11.3% year-on-year. The new construction area of housing in China decreased by 12% year-on-year, and the monthly decline was 19% narrower than that in December. The decline was significantly narrower than that since July last year. The willingness of real estate enterprises to start construction was low, and the main reasons for the large decline of new construction area were as follows: 1 The pressure on the capital chain is large, the supervision of pre-sale funds is strict, and new construction aggravates the pressure on the capital chain. 2. There is still great uncertainty in sales in the short term. From January to February, the real estate investment data increased by 3.7% year-on-year, which was higher than expected. However, considering the slow recovery rate of current sales, it is still difficult for new construction to improve significantly in the short term, and the follow-up investment will still be under pressure. However, from the whole year of 2022, it is expected that the downward range will not be too large.
Land: the decline continues to expand, and the recovery needs to be improved by sales and land supply: from January to February, the land purchase area was 8.38 million square meters, a year-on-year decrease of 42.3%, and the land transaction price was 36.9 billion yuan, a year-on-year decrease of 26.7%. The lack of land acquisition of real estate enterprises is mainly due to the fact that most private enterprises are still under the impact pressure of industry credit risk and the tight capital chain of enterprises. In order to alleviate the pressure of maturing debt, real estate enterprises have chosen to reduce expenditure and stop land acquisition expansion, superimposing that the industry is in a downward cycle. In the face of the uncertainty of future sales, state-owned enterprises have also reduced land acquisition expenses simultaneously to cope with the downward risk of the industry. We believe that whether the land market can recover in the future mainly depends on two factors: Sales and land supply. The recovery of the sales side will improve the capital pressure and enhance the land acquisition willingness of real estate enterprises; Increase the supply of high-quality plots, improve the structure and enhance the heat of the land market.
Financing: the financing structure improved and the credit environment continued to be relaxed: the development funds in place from January to February decreased by 17.7% year-on-year, 1.6pct narrower than that in December last year. The decline narrowed mainly due to the relaxation of financing for state-owned enterprises, but it is still difficult for private enterprises to finance. In February, the loan interest rate of the first house fell to 5.47%, and the loan interest rate of the second house fell to 5.75%. The credit environment was significantly improved compared with last year. The year-on-year growth rates of M2 in January and February were 9.8% and 9.2% respectively. The growth rate was significantly higher than that since the second half of last year, and the overall liquidity of the market was loose. However, at present, the industry is still under the impact of credit risk, the capital chain of some private enterprises is broken, and the development is exploding frequently, resulting in the increasing risk of uncompleted new houses. The demand is still in the wait-and-see period, superimposed with the poor capital circulation, and the market liquidity is difficult to improve the liquidity pressure in the industry. Subsequently, with the recovery of sales, the loose supervision of pre-sale funds, the capital circulation channel of real estate enterprises has been opened, the industry credit has been repaired, and the capital of real estate enterprises is expected to gradually improve.
Top 100 real estate enterprises: sales are close to halving, the growth rate of top 100 real estate enterprises slows down, and the concentration decreases: from January to February, the cumulative sales of top 100 real estate enterprises is 1048.4 billion yuan, a year-on-year decrease of 43.4%, and the concentration of sales amount of top 100 real estate enterprises is 68%, a year-on-year decrease of 28pct.
Bond financing: bond financing is still in the process of repair: from January to February, the domestic and foreign bond financing of real estate enterprises accumulated about 85.6 billion yuan, a year-on-year decrease of 59%, which was 11 PCT narrower than that in January. The interest rate of overseas bonds shows extreme differentiation. According to the comprehensive credit of the issuing body, the interest rate of overseas bonds ranges from 2.90% to 14.25%.
The business environment of the real estate industry has improved, and the policy easing continues: affected by the epidemic in March, the market recovery speed has stalled, but the current business environment of the real estate industry has indeed improved significantly compared with that from January to February, which is reflected in three aspects: 1. The market confidence in home ownership has recovered after the Spring Festival; 2. The capital level of enterprises has improved; 3. The price side of mainstream cities has gradually stabilized. We believe that in this year’s gdp5 Under the rigid requirement of 5%, stabilizing the real estate industry is still an important part of stabilizing the economy. Combined with the joint voice of many ministries and commissions last week, we strive to prevent and resolve the risks of the real estate industry. It is expected that more cities will introduce stronger policies in the future. We believe that the most difficult time for the current operation of the industry has passed, and state-owned enterprises, central enterprises and some high-quality private enterprises will resume the expansion. At the current time point, we suggest to focus on large state-owned enterprises and central enterprises that can continue to expand and maintain national expansion, such as poly real estate, Gemdale Corporation(600383) , China Merchants Shekou Industrial Zone Holdings Co.Ltd(001979) , CNOOC real estate, China Resources Land, and regional leaders with obvious regional advantages and can realize differentiated competition, such as Hangzhou Binjiang Real Estate Group Co.Ltd(002244) , Xuhui holding, Jinke Property Group Co.Ltd(000656) , Seazen Holdings Co.Ltd(601155) , etc. In terms of property sector, it is suggested to focus on Jinke service, Xuhui Yongsheng service, country garden service and China Resources Vientiane life with strong independence, external expansion and value-added services and continuous expansion ability.
Risk factors: policy risk: the progress of policy relaxation is less than expected, and the policy regulation of real estate tax and pre-sale funds is more than expected. Market risk: the decline of sales in the real estate industry exceeded expectations.
