On March 28, under the shock pattern of a shares, the real estate sector strengthened again, and 31 constituent stocks of CSI 800 real estate index rose across the board. Among them, Yango Group Co.Ltd(000671) , Cinda Real Estate Co.Ltd(600657) both rose by the limit, Yango Group Co.Ltd(000671) stepped out of the extreme market of 7 boards in 8 days, Sichuan Languang Development Co.Ltd(600466) rose by 6.83%, Huafa Industrial Co.Ltd.Zhuhai(600325) rose by 5.23%, and real estate leaders Greenland Holdings Corporation Limited(600606) , Shenzhen Overseas Chinese Town Co.Ltd(000069) rose by more than 4%. On the same day, the real estate ETF (159707), the only ETF in the market that tracks the CSI 800 real estate index, rose another 2.79% in a single day. It has rebounded 19.82% in the last nine trading days, with a turnover rate of more than 41% throughout the day. The single day turnover was nearly 30 million yuan, and the trading continued to be active.
In terms of news, recently, there have been frequent positive news in the real estate industry. According to media reports, the decline in mortgage interest rates in 103 cities in March increased by 4 and 6 basis points respectively compared with the previous month. Among them, the first set of interest rates in Chengdu decreased by 69 basis points in that month, with the largest correction range, and the loan interest rate of the second house decreased by 34 basis points.
On March 16, the special meeting of the financial stability and Development Committee of the State Council pointed out that for real estate enterprises, it is necessary to timely study and eliminate effective risk prevention and resolution solutions, and put forward supporting measures for the transformation to a new development model. On the same day, the CBRC, the CSRC and the Ministry of finance all released policy warmth to support the stable development of real estate. The CBRC said that it actively promoted the transformation of the development mode of the real estate industry, encouraged institutions to carry out M & A loans in a stable and orderly manner, and focused on supporting high-quality real estate enterprises to merge and acquire high-quality projects of difficult real estate enterprises. The CSRC said that it actively cooperated with relevant departments to effectively resolve the risks of real estate enterprises. The Ministry of Finance said that it is not qualified to expand the pilot cities of real estate tax reform this year. The centralized statements of multiple ministries and commissions have greatly boosted the confidence of the industry and stabilized market expectations.
Sinolink Securities Co.Ltd(600109) believes that since March this year, loose policies on real estate regulation have been frequent, and provincial capital cities and other key cities have tried their best to rescue the market. It is expected that a wide range of demand side easing policies will be gradually introduced, some first and second tier cities will take the lead in stabilizing, driving the fourth and fifth tier cities to build a bottom, and the valuation of real estate enterprises is expected to be repaired.
Public information shows that the real estate ETF (159707) tracks the “CSI 800 real estate index (399965)”, which is also the only industry ETF tracking the CSI 800 real estate index in the whole market, which is scarce. Compared with other real estate indexes in the market, the leading effect of CSI 800 real estate index is more obvious. It is the real estate ETF with the highest concentration of leading positions in the current listed real estate ETF, which is more in line with the industrial law of the post real estate cycle. Among them, the three leading stocks of Poly Developments And Holdings Group Co.Ltd(600048) , China Vanke Co.Ltd(000002) , China Merchants Shekou Industrial Zone Holdings Co.Ltd(001979) and China Merchants Shekou Industrial Zone Holdings Co.Ltd(001979) account for about 40%, and the equity of the top ten components accounts for nearly 70%. Focus on the development trend of HENGQIANG industry, which is the strong real estate leader. CSI 800 real estate index has increased by 2.53% since 2022, higher than the performance of mainstream real estate indexes such as Shenwan real estate 1.94% and CITIC Real Estate 1.10% in the same period.
Over the past two years, affected by the transformation of economic momentum, non speculation in housing and other major environmental factors, the share price of A-share real estate sector has dropped significantly, and the valuation cost performance has become increasingly prominent after the correction. Nowadays, with the exhaustion of bad conditions and the continuous marginal improvement of policies, the market’s enthusiasm for real estate has increased significantly.
According to wind data, at present, the PE of CSI 800 real estate index is only about 7 times, and the valuation cost performance is outstanding. In addition, the high dividend of nearly 5% in the past year provides a high-quality safety cushion, and the sector is at a low allocation level in fund allocation, and policy guidance is also gradually resolving industry risks.
Galaxy Securities believes that the real estate sector is currently in the combination of “fundamental bottom” + “policy bottom”, and the first quarter of this year is the window period for the allocation of the real estate sector. In the medium and long term, the warmer policies in the real estate sector will gradually promote the improvement of valuation. Under the expectation of improving concentration and stabilizing profits, the “three good real estate enterprises” with excellent management, smooth financing and diversified development will enjoy a higher valuation premium. It is recommended to pay attention to high-quality leading stocks.
Kaiyuan Securities said that it continues to be optimistic about the allocation opportunities of the real estate sector in 2022, the policy area continues to improve, the inefficient production capacity continues to be cleared, the industry pattern has been significantly improved, and high-quality enterprises have the basis for long-term valuation improvement.
Shenyin Wanguo Securities said that real estate is a pillar industry of China’s national economy, and the contribution of the industry itself and the industrial chain to GDP accounts for nearly 30%. Recently, officials have frequently stressed that stabilizing the economy and steady growth, while stabilizing the economy urgently needs to stabilize the real estate. It is expected that the policy restoration 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 the further improvement of the concentration. High quality real estate enterprises are expected to usher in both quantity and quality.
