Industry comments
The performance of the real estate and property sector continued to be strong this week. This week, Shenwan A-share real estate sector rose or fell by + 1.6%, ranking fourth among all sectors; Wind Hong Kong stocks and real estate sector rose or fell by + 5.7%, ranking first among all sectors. This week, the Hang Seng property service and management index rose or fell by + 9.3%, the Hang Seng China enterprise index rose or fell by – 0.6%, and the Shanghai and Shenzhen 300 index rose or fell by – 1.1%; The relative returns of the property index to Hang Seng China enterprise index and CSI 300 were + 9.9% and + 10.4% respectively.
The land market activity during the Qingming holiday is low. This week, the transaction and construction area of residential land in 300 cities across the country was 1.71 million square meters, with a single week month on month ratio of – 84%, a single week year-on-year ratio of – 82%, and an average premium rate of 6%. Since the beginning of 2022, a total of 100.64 million square meters of homestead has been built in 300 cities across the country, with a cumulative year-on-year increase of – 55%. Central enterprises, state-owned enterprises and platform companies are the main force in land acquisition.
On Monday, the sales of hand houses decreased month on month and year on year. This week, commercial housing transactions in 40 cities totaled 2.94 million square meters, with a week-on-week ratio of – 43% and a week-on-week ratio of – 56%, including – 40% and – 35% in first tier cities; Second tier cities – 42% mom and – 55% YoY; Third and fourth tier cities saw – 54% mom and – 73% yoy.
Second hand housing sales fell month on month and year-on-year this week. Second hand housing transactions in 17 cities this week totaled 1.02 million square meters, with a week-on-week ratio of – 34% and a week-on-week ratio of – 39%, including – 37% and – 28% in first tier cities; Second tier cities – 32% mom and – 39% YoY; The third and fourth tier cities recorded – 32% mom and – 77% yoy.
Chongqing issued a new deal to meet the housing needs of new citizens. On April 7, Chongqing issued the notice on the detailed rules for the implementation of financial support for new citizens to live and work in peace and contentment, proposing to meet the reasonable house purchase credit needs of new citizens in terms of commercial loans, provident fund loans and portfolio loans. At the same time, according to the research, Chongqing provident fund loans have implemented the policy of recognizing houses but not loans, and liberalized the restrictions on the second set of provident fund loans, which confirms the prediction that the recognition of houses and loans in high-energy cities will be loose mentioned in our external report “stepping into a virtuous cycle and on the right track, and the layout of real estate is at the right time”. We expect that the loan restrictions in more high-energy cities will be relaxed in the future, and there will be more loose support policies for new citizens to buy houses.
The market-oriented disposal of real estate enterprise risks is being promoted. On April 6, China Merchants Shekou Industrial Zone Holdings Co.Ltd(001979) announced that the signing of strategic cooperation agreements with great wall assets and jiazhaoye group will actively promote the sharing and coordination of advantageous resources in accordance with the market-oriented principle, which is conducive to China Merchants Shekou Industrial Zone Holdings Co.Ltd(001979) supplementing high-quality land resources, strengthening deep cultivation in Dawan District, and resolving cash flow risks of jiazhaoye on the other hand. At present, the policy strongly supports M & A loans and Project M & A between real estate enterprises. We expect that there will be more and more cooperation between state-owned enterprises, central enterprises, some private enterprises with stable cash flow and insurance enterprises at the project level in the future, which will help to resolve the risks of the real estate industry to a certain extent.
Investment advice
We believe that large-scale and multi-dimensional easing policies will continue to be introduced, and the industry will gradually enter a virtuous circle. In the real estate sector, we recommend green city China, China Construction Development International and Hangzhou Binjiang Real Estate Group Co.Ltd(002244) , which have contrarian sales growth and strong performance certainty. In the property sector, we are optimistic about the valuation repair flexibility of private property companies after the liquidity crisis of related real estate enterprises is lifted, and recommend Jinke service and country garden service.
Risk tips
Loose regulation is less than expected; The epidemic affected the implementation of policies and market recovery
