Core view
Market review this week. In the 12th week, the real estate sector index was stronger than the CSI 300 index and the gem index. The relative return of the real estate sector compared with the CSI 300 index was + 6.4%. The CSI 300 index closed at 417457, with a weekly increase of – 2.1%; The gem index closed at 263794, with a weekly increase of – 2.8%; The real estate sector index closed at 336998, with a weekly increase of + 3.8%.
Industry highlights this week. In 2022, the first batch of 33 plots of land were sold in Ningbo. Central bank: solidly promote the pilot research and development of digital RMB. Li Keqiang: maintain a moderate growth in credit and social finance. The CBRC released the green credit balance of 21 major banks in China. Guangdong will expand the scope of application of “six taxes and two fees” in 2022.
Sales of new houses this week increased compared with last week, while sales of second-hand houses decreased compared with last week. In the 12th week, the sales of new houses in 29 major cities was 22000, an increase of 4.7% over the 11th week; 6764 second-hand houses were sold in 11 major cities, a decrease of 14.9% compared with the 11th week; Compared with the 11th week, the growth rates of new housing and second-hand housing transactions in first tier cities were 32.7% and – 15.8% respectively; Compared with the 11th week, the growth rates of new housing and second-hand housing transactions in second tier cities were 4.1% and – 33.6% respectively. The inventory increased compared with last week, and the inventory sales increased compared with last week. In the 12th week, the inventory of 15 major cities was 1226000 sets, an increase of 1518 sets compared with the 11th week; The stock to sales ratio was 16.6 months, an increase of 0.4 months over the 11th week. The number of land market transfers increased compared with last week. In week 12, 26 large cities sold a total of 26 pieces of land. The amount of land transfer increased. In the 12th week, the land transfer fee of 26 major cities was 22.6 billion yuan, an increase of 22.39 billion yuan compared with the 11th week. The average premium rate increased. In the 12th week, the average premium rate of land transactions in 26 major cities was 9.2%, an increase of 9.2% compared with the 11th week.
Announcement of key companies China Merchants Shekou Industrial Zone Holdings Co.Ltd(001979) , China Enterprise Company Limited(600675) , Shanghai Chengtou Holding Co.Ltd(600649) issue the annual report for 2021 China Merchants Property Operation & Service Co.Ltd(001914) shareholder Beijing Shuguang Aviation Electric plans to reduce all shares of the company Yango Group Co.Ltd(000671) the issuer of the current “20 Yangcheng 01” chose not to adjust the coupon rate, and the coupon rate of the current bond is still 7.0% two years after the duration.
Investment proposal and investment object
Under the epidemic, the new housing market rebounded slightly this week, but the sales of second-hand houses continued to decline. In the middle of the week, the well-known real estate enterprises were in danger, triggering further adjustment of the market. Combined with the previous statements of many ministries and commissions and the failure of the expectation of interest rate reduction this week, we believe that regulators are not willing to resolve the problem entirely through demand stimulus. Based on this decision logic, the policy will eventually show an average force at both ends: the supply side will promote the problem real estate enterprises to sell the projects at a significant discount, and the state-owned enterprises and high-quality private enterprises will take over the projects; On the demand side, some cities with little upward pressure on house prices can further relax regulation. The final result is that the owner’s equity of the problem real estate enterprises has been lost, the creditors have suffered a certain degree of loss on average, and the resident Department has slowly increased a certain degree of leverage. In this framework, looking for marginal real estate enterprises is not a good strategy. Most marginal real estate enterprises will lose capital on a large scale and completely lose the ability to increase leverage in the future. Driven by the expectation of loose policy, we suggest the balanced allocation of front-line leaders and some high rated elastic targets, favor the front-line leaders with stable performance, and recommend Poly Real Estate ( Poly Developments And Holdings Group Co.Ltd(600048) , buy) and Vanke A ( China Vanke Co.Ltd(000002) , buy); Second tier leaders with flexible performance are recommended Gemdale Corporation(600383) ( Gemdale Corporation(600383) , buy), Longhu group (00960, buy), Xuhui holding group (00884, buy). At the same time, we are optimistic about the property management and business management industry with rapid growth and less credit damage. We recommend Country Garden Service (06098, buy), poly property (06049, buy), China Merchants Property Operation & Service Co.Ltd(001914) ( China Merchants Property Operation & Service Co.Ltd(001914) , overweight), New Dazheng Property Group Co.Ltd(002968) ( New Dazheng Property Group Co.Ltd(002968) , buy), rongchuang service (01516, buy), Xingsheng Commerce (06668, buy).
Risk tips
Sales were significantly lower than expected. The counter cyclical policy was less than expected. Interest rates have risen significantly.
