Under the dual background of "good selection" and "good selection" of the real estate market, investors are facing the dual risk of weakening the current market.
summary
what is the fundamental performance of the real estate industry at present since the beginning of the year, the sales area of new houses has continued to decline, and the year-on-year decline has continued to widen; In addition to a small number of low inventory cities, house prices are initially showing signs of recovery, most low - and middle-level cities are still in a downward trend. In this context, since this year, the land supply of local governments in the land market has shown the characteristics of improving quality and reducing quantity without reducing price.
why is the new housing market so weak we believe that there may have been a negative cycle of "weak demand - insufficient promotion - sluggish sales - payment collection supervision - deteriorating credit - financial hedging - weak expectation - weak demand" in the new housing market. The recent epidemic in many places has exacerbated the negative effect of this cycle, and the confidence of buyers and real estate enterprises in the future market continues to decline under the interaction of supply and demand.
where is the dilemma of real estate enterprises due to the continuous downturn of the sales side, the unspeakable loosening of the supervision of pre-sale funds and the lack of willingness of buyers in the M & a market, the cash flow pressure of real estate enterprises is still increasing. We conservatively estimate that a total of 1.1 trillion yuan of credit bonds and ABS of real estate enterprises will expire during the year, and the maturity peak will be month by month in the next half of the year. Superimposed with the risk contagion that may be caused by the debt rating downgrade, it is difficult to say the end of the credit risk event.
policy side in what areas or still space we believe that there is still room for further development of policies on both sides of supply and demand. The demand side focuses more on housing construction policies supporting reasonable housing demand, while the supply side may focus more on the relief and mitigation of credit problems of real estate enterprises (see the text for key measures to be concerned).
how will future fundamental indicators evolve considering the uncertainty of policy rhythm, we give three possible scenarios for the future market scenario 1: if the policy is strongly adjusted in the first half of the second quarter, the annual sales area is expected to be - 7%, the investment amount - 3% and the new construction area - 20% year-on-year scenario 2: if the effective policy occurs at the end of the second quarter and the beginning of the third quarter, the annual sales area is expected to be - 12%, the investment amount to be - 9%, and the newly started area to be - 31% scenario 3: if the policy side changes strongly in the fourth quarter, the annual sales area is expected to be - 17%, the investment amount - 15% and the new construction area - 41%.
how to grasp the investment opportunities of real estate stocks we believe that the dominant logic of short-term real estate stocks is still based on policy game. It is recommended that investors continue to embrace "all good" high-quality developers before observing the launch of key policy measures. In the future, if there are positive changes in the policies described in the text, the certainty of "elastic" private enterprise valuation repair opportunities will be greatly improved. In the medium and long term, the industry returns to the essence of operation. We continue to be optimistic about the "good students" with long-distance running ability in the development of the track and the "generalists" in the layout of the real estate track.
risk
Fundamental sales performance is lower than expected; The credit situation of real estate enterprises has accelerated and deteriorated; The impact of the epidemic exceeded expectations.
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I. how are the fundamentals of the current real estate industry performing
since the beginning of the year, new home sales have continued to decline and are now at the lowest level in history since the fourth quarter of last year, the sales area of weekly high-frequency new houses in 50 key cities has decreased by more than 30% in other months, except for a slight rebound in December. Especially in February and March this year, the year-on-year decline has widened to - 37% and - 51% respectively, Among them, the weekly average in March is only flat compared with that from January to February (under normal circumstances, the sales in March should pick up compared with January to February affected by the Spring Festival. The average recovery level in the past 10 years is + 29%, and the lowest recovery level is + 7%). Whether in terms of year-on-year decline or month on month seasonality, new home sales are at the lowest level in history.
chart: high frequency weekly new house sales area and year-on-year
Source: China database, China International Capital Corporation Limited(601995) Research Department
the consistency of sales decline of top 100 real estate enterprises widened Since September last year, the sales volume of top 100 real estate enterprises has maintained a year-on-year decline of - 30% to - 40%, but it has widened significantly since the beginning of the year. The year-on-year decline in January, February and March has reached - 41%, - 47% and - 53% respectively; Cumulatively, the sales amount of the top 100 real estate enterprises in the first quarter of this year decreased by 47% year-on-year, 3% lower than that in the first quarter of 2020, when the national economic activities were largely suspended due to the epidemic. If we further look at the main level of enterprises, we can see that although there is a certain differentiation in the year-on-year decline level among enterprises, the trend of widening the margin is basically the same. Even the year-on-year decline of sales of financially sound central state-owned enterprises in the first quarter is generally widening to more than 30% (the year-on-year decline in the fourth quarter of 2021 is mostly about 20%), The sales of some enterprises with credit risk generally fell by more than 50% year-on-year in the first quarter (about 40% year-on-year in the fourth quarter of 2021).
chart: monthly sales series of top 100 real estate enterprises
Source: Kerui, China International Capital Corporation Limited(601995) Research Department
chart: sales data of major real estate enterprises in March 2022
Source: Kerui, company announcement, China International Capital Corporation Limited(601995) Research Department
in 2021, house prices fell by nearly 3%. Since the beginning of the year, house prices in only a small number of low inventory cities have initially shown signs of recovery, but the continuity is not strong. House prices in most low and middle-level cities are still down 2021: in the 49 cities we monitored, second-hand house prices continued to rise in the first half of the year, with a cumulative increase of 4.2%. In the second half of the year, they fell rapidly by 6.8%. At the end of the year, they fell by 2.9% compared with the beginning of the year. Among them, 20 high-energy cities (20) fell by 1.8% and 29 low-level cities (29) fell by 4.9%. Since November 2021, the margin of second-hand housing transaction volume has stabilized and rebounded slightly. At the beginning of this year, the second-hand housing price has also stopped falling and turned up driven by the trading volume, but there are still two hidden worries behind it:
second-hand house price trend has obvious polarization between energy levels and regions. Only a small number of low inventory cities have increased, and house prices in most cities have still decreased since the beginning of the year.
if the 49 cities we monitored are divided according to energy levels, the second-hand house prices in 20 high-energy cities increased by 1.2% from January to February (including Zhengzhou, Harbin and other high-energy cities, but also decreased significantly), and 29 low-energy cities decreased by 0.2% from January to February; If divided by region, five of the 12 urban agglomerations we monitored in February rose month on month, seven fell month on month, and the Beibu Gulf Urban Agglomerations fell by - 4% month on month. The trend of house prices has changed from the previous same rise and fall, but with different ranges, to the difference in the direction of rise and fall. Only the house prices in the first tier and strong second tier low inventory cities (the generalized decontamination cycle is only 6 months or less) have increased, and the house prices in most cities are still continuing to decline. In fact, from the phenomenon of low inventory and strict purchase restrictions in cities with rising house prices, it can be inferred that the root cause of rising house prices lies not in insufficient demand control, but in insufficient supply.
leading indicators show that a small number of cities with slightly upward housing prices may also be difficult to continue the upward trend, while the month on month decline of house prices in other cities is likely to widen on the supply side, the listing price index of key cities fell slightly in February, and the price expectation of potential sellers decreased; On the demand side, the month on month rise in the bargaining space of key cities in February also shows that the wait-and-see mood of potential buyers has increased again, and the market presents the characteristics of oversupply. Even in cities where house prices have risen before, this trend may be difficult to continue, especially considering the negative impact of the recent epidemic, we expect the month on month decline or further widening of house prices in other cities.
chart: transaction volume of stock housing market
Source: China Index database, real estate intermediary websites such as shells, China International Capital Corporation Limited(601995) Research Department
chart: transaction price of stock housing market
Source: China Index database, real estate intermediary websites such as shells, China International Capital Corporation Limited(601995) Research Department
chart: regional difference of transaction price in stock housing market
Source: China Index database, real estate intermediary websites such as shells, China International Capital Corporation Limited(601995) Research Department
chart: leading indicators of scene bearing of stock housing market
Source: China Index database, real estate intermediary websites such as shells, China International Capital Corporation Limited(601995) Research Department
under the background of weak sales, the local land supply behavior in the land market has shown the characteristics of improving quality, reducing quantity but not reducing price since the beginning of the year From the perspective of total volume, in January, February and March this year, the transaction area of residential land in 300 cities decreased by 50%, 71% and 60% respectively year-on-year, and the transaction amount decreased by 70%, 67% and 48% respectively year-on-year. The cumulative number of transactions in the seven cities [1] that have completed the first round of centralized local auction is only 21% of the total number of transactions in 2021 (the first round accounted for 37% in 2021). The trend of transaction shrinkage is obvious. At the same time, local governments have not lowered the starting price setting. It is a more intuitive observation that the margin of the starting land to goods ratio in the first seven cities with centralized local auction in 2022 is higher than that in the third batch last year, and the margin of the starting land to goods difference is flat and slightly lower [2]; From the final transaction results, the difference between the traded land and goods only went down to the second batch and the third batch of last year, but the ratio of traded land and goods went up to a higher level than the second batch of last year [3], which reflects that the heat of the land market only rebounded slightly compared with the third batch of last year, but it is far from reaching the level of the second batch of last year. At the same time, the quality of the traded plots has been significantly improved, which directly leads to the willingness of central and state-owned enterprises to participate in the current weak competition High quality open land market, and lack of interest in the acquisition and M & a market.
chart: changes in key indicators of key cities that recently completed the first round of centralized land auction in 2022
Source: China Index database, official websites of local natural resources bureaus, China International Capital Corporation Limited(601995) Research Department
II. Why is the new housing market so weak
We believe that there may have been a negative cycle of "weak demand - insufficient promotion - sluggish sales - payment collection supervision - deteriorating credit - financial hedging - weak expectation - weak demand" in the new housing market. The epidemic situation in many places has repeatedly exacerbated the expected downward speed in the cycle, resulting in rising pressure on the industry:
under the background of macroeconomic pressure, the willingness and ability of "pure rigid demand" groups to buy houses are insufficient Since the epidemic, there has been continuous pressure on economic development, weak investment and consumption, and residents' expectations of employment stability and income rise are insufficient. Superimposed on the fact that most cities have not formed expectations of house price rise (which is also the result of residents' difficulty in employment and weak income), the "pure rigid demand" house buyers without housing and loans (such as graduates) lack the willingness and ability to buy houses.
reasonable improvement demand is difficult to release under the current purchase, loan and sales restriction policies at present, there are more than 70 cities in China with limited purchase, loan and sales policies, and the sales amount accounts for more than 60% of the country. However, there are only about 20 cities with short-term excessive pressure on house prices. The strict demand restriction policy implemented in cities without obvious pressure on house prices makes it difficult for reasonably improved demand groups with certain savings and more stable income to release the demand for house purchase. For example, families that have settled the loan after purchasing the first house, but the family population increases and need to "sell the old and buy the new" need to accept a higher down payment ratio for the second house, while parents need to wait for a long time or meet certain local social security requirements to buy the housing required by their parents, etc.
demand continues to be weak and the universal oversupply of pre-sale funds leads to insufficient willingness and ability of supply side real estate enterprises to push the market demand continues to be weak, which leads to the fact that real estate enterprises have to face the problems of new marketing costs and slow de marketing at the same time, further aggravating their cash flow pressure. Even for buildings with good location and smooth de commercialization, there is still excess supervision of pre-sale funds at the practical level. On the one hand, the so-called "make-up" and "make-up" generally exist, that is, the pre-sale funds are sufficient for the pre-sale buildings, the buildings that have not supervised the pre-sale funds before, and the construction funds of the buildings that have not been pre-sale but the project has been started; On the other hand, projects often involve multiple lending banks, and there is a phenomenon that each bank strengthens supervision due to insufficient information sharing among banks. In this case, the proportion of pre-sale funds of real estate enterprises actually supervised is too high, and the amount of funds that can be withdrawn for debt repayment is very limited, which ultimately makes the willingness and ability of real estate enterprises to push the market obviously insufficient.
real estate enterprise credit risk event makes residents' wait-and-see mood for house purchase heavier, thus forming a negative cycle, and the risk aversion of financial institutions will accelerate and strengthen this negative cycle under the dual weak pattern of supply and demand caused by the above-mentioned multiple factors, real estate enterprises continue to consume cash on hand, credit risk events continue to deduce, and residents' concerns about the delivery capacity of enterprises also make the remaining small amount of demand enter the wait-and-see stage, making it more difficult for real estate enterprises to sell and push less, forming a negative cycle again and again. In this process, the risk appetite of financial institutions is also declining, gradually affecting private real estate enterprises with relatively stable operation, so as to accelerate and strengthen the whole cycle process, making the sales of new houses continue to be sluggish.
epidemic is also an objective factor leading to the depression of the new housing market. Under the background of negative circulation, the impact of the epidemic may be amplified since March, the recurrence of the epidemic in many places has also cast a shadow on the release of demand for new houses. But what is more worrying is that in the negative cycle of "weak demand - insufficient promotion - sluggish sales - collection supervision - deteriorating credit - financial hedging - weak expectation - weak demand", the expectation may decline nonlinearly. If the epidemic lasts too long, it may lead to the accumulation of too many private enterprises and even worse difficulties for the industry.
III. Where is the dilemma of real estate enterprises
Based on the above analysis of the causes of the plight of new house sales, we can summarize the four pressures faced by real estate enterprises at the cash flow level:
The difficulty of de marketing and the increase of cost expenditure caused by the interference of epidemic situation and insufficient demand;
The excess supervision of pre-sale funds at the practical level makes it difficult for real estate enterprises to collect money even if they sell successfully;
The frequent occurrence of credit risks of private real estate enterprises has led to a rapid decline in the risk appetite of financial institutions. Even private real estate enterprises with relatively normal operating conditions have begun to tighten the refinancing channels. Recently, the financing difficulties and financing costs of central state-owned enterprises with stable finance have also increased;
In the current environment, a large number of credit ratings of real estate enterprises have been downgraded, which is easy to trigger debt default terms and form cross default, forming a de facto "run".
in this context, it seems to be a solution to promote the acquisition and merger of high-quality central state-owned enterprises, but the actual progress is not ideal although the policy level has previously allowed the collection of M & A loans not to be included in the three red lines, the central state-owned enterprises must also consider their own healthy development and face the assessment of financial indicators by the SASAC and other competent departments, so the actual willingness to collect M & A is not strong. Moreover, with the increasing market pressure, there will be more and more enterprises in danger. Only from the perspective of volume, it is more and more difficult to solve the enterprise credit problem through collection and M & A. Take the top 50 real estate enterprises as an example (the total amount of equity sales in 2021 accounted for 43% of the country). Among them, the proportion of equity sales of enterprises that have substantially defaulted reached 25%; The bond yield is abnormally high, the market is generally worried that it may be in danger in the near future and if the sales downturn lasts too long, the proportion of enterprises that may be in danger has also reached 25%, accounting for half in total. At the same time, the equity sales of enterprises with M & a capability (mainly central state-owned enterprises and leading private enterprises with healthy finance) accounted for only 44%; The proportion of enterprises that can protect themselves but have no M & A ability (mainly state-owned enterprises with relatively high leverage) is 6%. Here, small real estate enterprises with low volume and inconvenient to observe at the statistical level have not been considered. The problems faced by such enterprises may need to be obtained through extensive research.
considering the fact that the progress of M & A at the company level is not smooth, at present, real estate enterprises can only try their best to wait for the gradual recovery of the real market through cash on hand, Limited sales collection and asset disposal at the project level, and the biggest "gateway" in this waiting process is the maturing debt
in terms of asset disposal, the seller's price demands and the buyer's willingness to purchase assets are the main "blocking points" from the perspective of the seller, it is unwilling to dispose of assets at too low price, mainly because it will accelerate its process from liquidity crisis to insolvency. From the buyer's point of view, the process of acquiring assets itself requires high adjustment ability, and the history of assets to be acquired may be more complex. In the same period, the sharp reduction of competitors in the open land market enables central state-owned enterprises to obtain "cheap" and "clean" land, so their willingness to acquire assets is low. Even if the two sides finally reach an agreement on the M & A behavior and price, and the purchase money is usually paid in multiple payments, which is of limited help to the short-term liquidity crisis.
in terms of debt maturity, it is conservatively estimated that a total of 1.1 trillion yuan of credit bonds and ABS will expire in the year. Whether an enterprise can carry through the "pass" largely depends on its financial strength, the pace of fundamental recovery and the sequence of maturity dates by debt type: 1) the total maturity of US dollar bonds of major real estate enterprises in 2022 is US $48.8 billion, the peak maturity is in April and June, and the maturity of each month exceeds US $7 billion. 2) In 2022, the total maturity of domestic bonds of major real estate enterprises was 602 billion yuan, and the maturity peak in July and August exceeded 80 billion yuan. 3) In 2022, the total amount of ABS due for the supply chain and house purchase balance of major real estate enterprises is 240 billion yuan, of which 195.5 billion yuan can be located in different months, and the other 44.5 billion yuan can be repaid by hand (the repayment month cannot be specified). 4) In addition, there are probably more than 600 billion yuan of CMBS and REITs, but it is difficult to confirm the maturity of enterprise entities and different time points. Overall, the maturity peak of real estate enterprises during the year was distributed in April, June, July and August, all exceeding 120 billion yuan, of which the highest peak in July exceeded 160 billion yuan.
chart: maturity of different types of debts of real estate enterprises in 2022
Source: Bloomberg, Wande information, China International Capital Corporation Limited(601995) Research Department
IV. in what aspects or areas does the policy side still have space
policy side has made many efforts on the demand side, but the response of the sales level to the policy is not very obvious according to our statistics, since the fourth quarter of 2021, the central level has made nearly 30 statements on real estate, and there are also positive words such as "supporting reasonable housing demand" and "promoting the healthy development and virtuous cycle of the real estate industry". From the actual landing policy:
financial policies have made great efforts to boost the demand of the industry: mainly focused on maintaining reasonable and sufficient credit supply and guiding the decline of housing loan interest rate. At present, the housing loan lending cycle has dropped to 34 days, reaching the lowest level in the past three years, and the housing loan interest rate has also decreased by 40bp in the past two quarters, To some extent, this makes the stock housing market scene of some core cities stabilize slightly in stages;
housing and construction policies have been gradually put into force since the end of 2021, but they are mainly relaxed at the local level, mainly in medium and low intensity in small and medium-sized cities: up to now, more than 40 cities have introduced policies or no policies at the local level, but actually implemented relaxation measures, including settlement / talent introduction policies and house purchase subsidies (16 cities) 6 policy adjustment stages: Provident Fund loan limit and down payment ratio of two sets of provident fund loans (12 cities), down payment ratio of the first set of commercial loans (10 cities), house and loan recognition standard (Zhengzhou), sales restriction period (Qingdao, Harbin), purchase restriction relaxation (Fuzhou, Quzhou, Qinhuangdao, Nanchang). At present, no obvious effect (epidemic or interference) has been seen at the sales level of corresponding cities, and the subsequent impact still needs to be observed.
chart: mortgage lending cycle and marginal change of interest rate
Source: Shell Research Institute, China International Capital Corporation Limited(601995) Research Department
looking ahead, in order to alleviate the drag of the property market downturn on investment and macroeconomic growth, as well as the liquidity crisis faced by private real estate enterprises (especially private enterprises that operate more prudently but are still affected by the downward risk appetite of financial institutions), we believe that policies may still need to continue to make efforts in both supply and demand.
On the demand side, mortgage liquidity is no longer the main contradiction at present. Further policies may mainly focus on housing construction (including some financial and fiscal policies). Relevant ministries and commissions should guide and convey the spirit of the policy from top to bottom, and all localities should implement the policies according to the city, including:
in terms of purchase restrictions, the purchase qualification of target groups with reasonable housing needs is moderately relaxed: if the social security period is shortened, the supplementary payment of social security shall be properly recognized, the settlement conditions of talents shall be moderately relaxed, the requirements for relatives to join in the purchase of houses shall be relaxed, and the purchase restriction scope shall be shortened to the core area; Appropriate in kind subsidies, capital subsidies or total price discounts shall be given to the purchase of imported talents.
in terms of loan restriction, reduce the capital threshold or expenditure cost of house purchase: for example, for families with "no house loan" or "house loan clearance" and too small per capita living area, implement the treatment of the first house or optimize it on the basis of the treatment of the second house, reduce the down payment proportion of provident fund loans, increase the upper limit of the amount, open up applications in different places, further reduce the housing loan interest rate in some hot cities, and reduce the deed tax on house purchase transactions.
in terms of sales restriction, relax the conditions of sales restriction and promote the transaction of stock housing market: such as shortening the period of sales restriction or loosening the recognition standard of the period of sales restriction, reducing the tax rate of second-hand housing transactions and adjusting the requirements for the period of tax reduction and exemption of second-hand housing transactions.
in terms of price limit, moderately adjust the target of house price control: if the price of new houses can be increased by three years, update the guidance price of second-hand houses.
On the supply side, policies may focus more on alleviating the liquidity problems of real estate enterprises. The main measures should be formulated, released and promoted by relevant ministries and commissions, and implemented in cooperation with local governments, including:
further optimization of the regulatory policy on pre-sale funds: if it is clear that key regulators take the project cost as the benchmark, avoid significant over regulation, moderately relax the fund withdrawal standards and processes for general regulators, report the information of inter-bank regulatory accounts uniformly and coordinate the management, maintain the consistency of fund regulation of regulatory accounts in different regions, and adjust the fund management gradient of real estate enterprises with different qualifications, but not excessively, The pre-sale funds of phased projects shall also be supervised according to the phased progress of the project.
reserve and implement the policy countermeasures for the credit problems of real estate enterprises: if the defaulting enterprises are quickly organized for debt restructuring, the financial stabilization fund participating in the asset disposal of real estate enterprises is established to provide financing support and policy convenience for AMC, central state-owned enterprises and other M & A entities, so as to encourage them to inject capital into problematic enterprises, and the regulatory authorities participate in coordinating the asset disposal of real estate enterprises in order to return the land Land use right transfer and other modes release the stock land value of real estate enterprises.
strengthen the policy support for the financing of real estate enterprises: if financial institutions are encouraged to set a certain grace period for the due debts of real estate enterprises, allow enterprises to convert bank credit lines into bond issuance lines, support real estate enterprises to issue securitization products for assets held by real estate enterprises, appropriately liberalize the domestic equity financing of real estate enterprises (including the return of overseas listed enterprises), increase the amount of development loans and reduce interest rates, The counter cyclical adjustment factor is introduced to optimize the quantitative index system such as the three red line operation details of real estate enterprises, the bank concentration management scheme and the debt ratio assessment of SASAC.
policies and measures to improve the cash flow of enterprises: if the tax rate or tax payment requirements are flexibly adjusted according to the cycle situation, the advance payment is cancelled and the tax is paid again after the sales receipt is realized, the deferred tax is allowed; Allow the land expenditure of real estate enterprises to be moderately delayed and land withdrawal is allowed; The government organizes funds to directly collect the unsold projects under construction of the house purchase enterprises for leasing, and then withdraw the investment through REITs.
v. how will future fundamental indicators evolve
looking ahead, how the fundamental indicators of the real estate industry will evolve depends largely on the actual content and timing of the follow-up policies. Considering that there is still great uncertainty, here we give three assumptions and deduction predictions:
scenario 1: assuming the strong adjustment of the above policies in the first half of the second quarter (out of the forward-looking expectation of the future weakening of the real estate market and macroeconomic figures), we expect the prosperity of the real estate market to recover significantly in the middle and later part of the second quarter and continue to recover in the third and fourth quarters. In this case, it is estimated that the annual sales area is - 7%, the sales amount is - 2%, the investment in real estate development is - 3%, the newly started area is - 20%, and the physically completed area is + 4%.
chart: prediction of main indicators of real estate industry fundamentals in case 1
Source: National Bureau of statistics, China International Capital Corporation Limited(601995) Research Department
scenario 2: assuming that the real estate market and macroeconomic figures continued to weaken in the second quarter and the policy end showed the above-mentioned strong adjustment at the end of the second quarter and the beginning of the third quarter, we expect the prosperity of the real estate market to fluctuate at the bottom in the second quarter (although the year-on-year decline of various indicators in the second quarter may be narrower than that in the first quarter due to the influence of the base, the narrowing range will be significantly weaker than that in the first case), The boom gradually recovered in the third quarter and continued to rebound in the fourth quarter. In this case, it is estimated that the annual sales area is - 12%, the sales amount is - 11%, the investment in real estate development is - 9%, the newly started area is - 31%, and the physically completed area is - 2%.
chart: prediction of main indicators of real estate industry fundamentals in case 2
Source: National Bureau of statistics, China International Capital Corporation Limited(601995) Research Department
scenario 3: assuming that the above-mentioned strong adjustment occurs at the policy end in the fourth quarter, we expect that the prosperity of the real estate market will not reach the inflection point until the fourth quarter (similarly, due to the influence of the base, each index may narrow the year-on-year decline in the second and third quarters, but the month on month performance will be significantly weaker than the seasonal performance, and the narrowing range of the decline will also be significantly weaker than the first two scenarios). In this case, the annual sales area is expected to be - 17%, the sales amount - 20%, the investment amount - 15%, the newly started area - 41% and the physically completed area - 6%.
chart: prediction of main indicators of real estate industry fundamentals in case 3
Source: National Bureau of statistics, China International Capital Corporation Limited(601995) Research Department
VI. how to grasp the investment opportunities of real estate stocks
short-term leading logic still focuses on policy game, the general direction has been clear, and the key lies in the grasp of investment rhythm at present, the fundamentals continue to weaken and the credit risk of real estate enterprises continues to ferment. The urgency and necessity of the above-mentioned policy adjustment have further improved. We believe that there are no too many differences on the future direction of the policy, and the main expectation difference comes from the judgment difference on the rhythm of the policy. We suggest that investors continue to embrace "all good" high-quality developers before observing the strong adjustment of the above policies and measures. If there is a trend of the above policy adjustment in the future, we can consider giving due consideration to the "flexible" private enterprises.
medium and long term will eventually return to the logic of "good students" long-term share increase, and high-quality leaders are expected to continue to win.
After the long-term adjustment of business environment and competitiveness of real estate enterprises, we believe that the market orientation of fine competition and competition of real estate enterprises will return to the final round. Previously, real estate enterprises that relied on the leveraged path to achieve growth and relatively extensive operation will face problems such as the continuous contraction of the medium-term dimension and the lack of share competitiveness in the long-term dimension, even if they are not cleared in this round. Therefore, after this round of short-term game policy logic, in the medium and long term, we continue to be optimistic about the "good students" who develop the track and the "generalists" who deeply cultivate the real estate track.
chart: NAV allowance and forward P / E ratio of A-share developers
Source: Wande information, company announcement, China International Capital Corporation Limited(601995) Research Department
chart: NAV allowance and forward P / E ratio of H-share developers
Source: Wande information, company announcement, China International Capital Corporation Limited(601995) Research Department
[1] eight cities have actually completed the first round of centralized soil photography in 2022. However, due to the obvious change in the land promotion scope of Chongqing this time (only the land in the central urban area is introduced), in order to achieve the relative comparability of different batches in statistics, only seven cities are considered in the statistics of centralized soil photography in this section.
[2] the ratio of starting land to goods refers to the ratio between the starting land price and the potential marketable price. The difference between starting goods and land refers to the difference between the potential marketable price and the starting land price. The rise of the former and the decline of the latter indicate that the local government is raising the starting price. It should be pointed out that if there is little difference in plot quality between different batches, the trend of the two indicators is opposite; If the change direction of the two is the same (or the change direction is opposite but the change range is quite different), the judgment of the change direction of the starting price should be based on the latter as far as possible, mainly because the former will be affected by the quality of the plot to a certain extent (the better the quality is, the higher the ratio is systematic). According to the above rules, in 2021, compared with the first batch, the starting price of the second batch did not actually decrease (and the quality of the plot decreased significantly), but it decreased in the third batch (and the quality of the plot improved significantly). This year, the difference between the first batch of goods and land was only flat and slightly decreased, and the ratio of land to goods rose to the first batch over the past years, indicating that the local government did not reduce the starting price, but significantly improved the quality of the plot.
[3] the definition of land to goods ratio and land to goods difference is similar to that of land to goods ratio and land to goods difference, except that the starting land price is replaced by the transaction land price. Similarly, the judgment of transaction heat should be based on the difference of transaction goods and land as far as possible. The change difference between the two indicators reflects the quality of the plot.
