Basic conclusion
The expectation of policy improvement was strengthened, and the real estate sector led the rise of a shares. When the marginal improvement of regulatory policies is expected, the real estate sector will have upward momentum. At present, the market has strong expectations of wide-ranging easing of real estate regulation, attracting a large amount of capital inflow and driving up the share price of the sector. From March 15 to April 1, the real estate sector rose 29.1%, leading the rise of a shares. Although some small and medium-sized real estate enterprises in this round of rise may obtain excess returns through M & a logic, we are optimistic that in the future, large-scale improvement policies will continue to be introduced, the industry fundamentals will bottom up, high-quality real estate enterprises are expected to usher in valuation repair, and their performance is expected to continue to grow in the future.
Industry fundamentals are bottoming out, and policy relaxation needs to be strengthened. Recently, moderate easing policies have been introduced at both ends of real estate credit and supply and demand. Among them, the "Zheng 19 articles" issued by Zhengzhou fully revealed the real estate market, and the "first shot" of canceling purchase and sales restrictions has been launched in Quzhou, Zhejiang and Qinhuangdao, Hebei. Credit support has brought a certain degree of improvement to the financing end of real estate enterprises. However, due to the limited scope and intensity of the current easing policy and the impact of covid-19 epidemic, the effect of boosting real estate sales has been delayed to some extent. The recent sales situation has not improved. The sales amount of the top 100 real estate enterprises fell by 47% year-on-year from January to March 2022. The industry fundamentals are in the process of bottoming out, and the expectation of introducing a wide range of easing policy is still strong.
If the necessity is superimposed with medium and long-term support, the inflection point of the industry will come. ① As a pillar industry of the national economy, the healthy development and virtuous cycle of the real estate industry is an important guarantee for China's GDP to achieve a growth rate of 5.5% in 2022; ② We should prevent systemic financial risks caused by real estate risks; ③ To meet the reasonable needs of consumers and protect people's livelihood, we believe that it is necessary to introduce loose policies to promote the recovery of the industry. The new citizens derived from the steady growth of urbanization, the miniaturization of families and the increase of per capita residential area are expected to generate about 80 million sets of commercial housing demand, which will be released in 8-10 years, which will become an important support for the future development of the real estate industry. We believe that under the background of medium and long-term support, the inflection point of the industry will come when loose policies are introduced to cover the bottom of the property market.
Multidimensional policy easing boosted market confidence, and the layout of the sector was at the right time. We expect that the future policy easing will be carried out from three aspects: ① at the top-level design end, the requirements of "three red lines" may be optimized, or not limited to the fact that M & A loans are not included in the "three red lines"; ② On the supply side of real estate enterprises, the national pre-sale fund supervision policy needs to be improved in the third and fourth tier cities, and the real estate financing channels may be widened; ③ On the demand side of house purchase, "one city, one policy" will be applied more flexibly. There is still room for the continuous reduction of housing loan interest rate. The standard of house and loan recognition in high-energy cities may be loosened and provide more convenience for new citizens to buy houses. It is expected that the scope of cities with purchase and sales restrictions will be expanded in third and fourth tier cities, and the monetized resettlement of shed reform may be promoted. A wide range and multi-dimensional easing policy will be introduced to boost market confidence and promote the healthy development and virtuous cycle of the real estate industry.
Investment advice
We expect that large-scale and multi-dimensional easing measures will continue to be introduced, and the real estate industry will be on the right track of a virtuous cycle, which is a good time to lay out the real estate sector. In the real estate sector, we are optimistic about enterprises with contrarian growth of sales and investment and strong certainty of future performance. We recommend Greentown China, Jianfa international and Hangzhou Binjiang Real Estate Group Co.Ltd(002244) . It is recommended by the property management department and the property management department to develop the business, and is optimistic about the value-added services of the private property management company.
Risk tips
Loose regulation is less than expected; The epidemic affects the implementation of policies and market recovery; Several real estate enterprises have defaulted on their debts
