This month’s view: the central government has intensively voiced “stabilizing real estate” and taken multiple measures to alleviate the capital pressure of real estate enterprises from the aspects of pre-sale capital supervision; On the whole, the transaction in the real estate market is still weak. In February, the medium and long-term loans of residents turned negative for the first time. Land acquisition and domestic bond issuing real estate enterprises are still concentrated in central state-owned enterprises or high-quality private enterprises with good credit qualifications. The sentiment of home buyers and the investment confidence of real estate enterprises need to be boosted and repaired. Considering that the pressure on the development of the industry remains unabated, there is still room for improvement on the policy side, and the valuation of the sector is expected to continue to repair. In the medium and long term, with the withdrawal or contraction of some real estate enterprises in the painful period of this round, the overall pattern of the industry is expected to be optimized, and the market share and profitability of brand real estate enterprises with financing and control advantages are expected to be improved. The development sector pays attention to the leading real estate enterprises Poly Developments And Holdings Group Co.Ltd(600048) , Gemdale Corporation(600383) , China Merchants Shekou Industrial Zone Holdings Co.Ltd(001979) , China Vanke Co.Ltd(000002) and other leading real estate enterprises with strong short-term pressure resistance and prominent medium and long-term competitive advantages, and moderately pays attention to the elastic second-line targets, such as Hangzhou Binjiang Real Estate Group Co.Ltd(002244) , Seazen Holdings Co.Ltd(601155) , Jinke Property Group Co.Ltd(000656) . At present, the valuation of the property management sector has reached an all-time low, and the downward pressure of the quarterly and mid-term guidelines of the annual report has been gradually released. With the continuous deregulation of policies and the improvement of the capital side of development enterprises, it is expected to bring the repair of high-quality property management valuation, focusing on such services as country garden service, poly property, xinchengyue service, Jinke service, Xingsheng business, etc.
Policy: multi sector intensive voice “stabilizing real estate”, and provincial capital cities release the signal of loosening the property market. In February, there were 16 housing related policies, including 2 tight policies and 7 loose policies. The frequency of housing related tight policies in a single month hit a new low in nearly a year. Many departments of the central government have made an intensive voice to “stabilize real estate”, adopted multiple measures to alleviate the financial pressure of real estate enterprises, and made it clear that there are no conditions to expand the pilot cities of real estate tax reform this year; Due to the continuous interpretation of urban implementation policies, Zhengzhou and other core cities have relaxed purchase and loan restrictions, which has a certain demonstration effect.
Capital: the social finance data was lower than expected, and the medium and long-term loans of residents turned negative for the first time. In February, the growth rate of M2 decreased by 0.6 percentage points month on month, the growth rate of social financing stock decreased by 0.3 percentage points month on month, the social financing data was lower than expected, the medium and long-term loans of residents turned negative for the first time since statistics, and the overall financing scale of real estate enterprises fell month on month, reflecting the lack of quality of “wide credit”; Mortgage interest rates in key cities continued to decline. Considering that the fundamentals of the real estate market have not improved, there is still room for further reduction in the follow-up. Monetary policy is expected to strengthen the support for key areas of real estate.
Property market: the pushing of the market slowed down, the transaction was weak, and the clearing cycle increased cumulatively. Affected by the Spring Festival holiday and the repeated epidemic, the supply contracted significantly in February. The average approved listing area of commercial houses in 35 cities decreased by 59.3% month on month, which also inhibited the transaction. The average monthly daily transaction of new houses in key 50 cities decreased by 29.8% year on year, 24.8% month on month, and the average monthly daily transaction of second-hand houses in key 20 cities decreased by 38.3% year on year, 29.7% month on month. The average clearing cycle showed a cumulative upward trend, up 1.1 months month on month. Among the 100 cities, the first tier cities stopped falling and stabilized, the second and third tier cities continued to decline, and the differentiation of the property market intensified.
Local market: the volume and price of “local auction vacuum period” fell, and it is difficult to be optimistic in 2022h1. In February, among the 22 cities with centralized land supply, only Beijing completed the first batch of local auction, and the trading volume decreased. Recently, the first batch of local auctions in Hangzhou and other places have been listed one after another. The local auction rules are friendly to ensure the profit level and improve the enthusiasm of real estate enterprises to participate in the auction. From the first batch of local auction, the local auction heat is differentiated, and the bidding real estate enterprises only show high enthusiasm for high-quality plots in high-quality areas.
Real estate enterprises: the sales of the top 100 real estate enterprises decreased by more than 40% year-on-year, and high-quality real estate enterprises are the main force to obtain land. The sales amount and sales area of the top 100 real estate enterprises in a single month in February 2022 decreased by 46.5% and 42.6% year-on-year. During the Spring Festival holiday in February, migrant workers returned home, the market ushered in the off-season, and the real estate enterprises significantly reduced their supply. Although the policy continues to release easing signals, the fermentation cycle still needs to be conducted from the end of the policy to the end of the market. In the short term, the market still faces great downward pressure. At the same time, affected by the high base in the same period in 2021, the year-on-year decline in March is expected to further expand. The land acquisition efforts of the top 50 real estate enterprises continued to be low. In February, only 11 real estate enterprises such as poly and Vanke made gains, all of which are central state-owned enterprises or high-quality private enterprises with stable finance and good credit qualification. Sector performance: in February, Shenwan real estate sector fell 0.78%, underperforming CSI 300 (0.39%); As of March 30, Shenwan real estate sector rose 8.21% in March, significantly outperforming CSI 300 (- 7.15%). At present, PE (TTM) of real estate sector is 8.6 times, lower than 12.3 times of CSI 300, and the valuation is at the 26.4% quantile in recent five years.
Risk tips: 1) if the subsequent supply of goods is impacted due to insufficient new soil storage, it will have a negative impact on the sales, commencement and investment of the industry; 2) If the pressure of property market deregulation exceeds expectations and sales continue to exchange price for volume, it will bring some early high price impairment risk; 3) Policy care is limited, and the adjustment range and time of the industry exceed expectations, which will have a negative impact on the development of the industry.
