Industry comments
The real estate sector performed well this week, and the property sector lost 300 in Shanghai and Shenzhen. This week, Shenwan A-share real estate sector rose or fell by + 4.5%, ranking first among all sectors; Hong Kong stocks and real estate sector rose or fell by + 1.6%, ranking sixth among all sectors. This week, the Hang Seng property service and management index rose or fell by - 5.2%, the Hang Seng China enterprise index rose or fell by - 0.1%, and the Shanghai and Shenzhen 300 index rose or fell by - 2.4%.
On Monday, the sales area of hand houses decreased month on month and year on year. This week (from January 1 to January 8), commercial housing transactions in 40 cities totaled 4.11 million square meters, with a week-on-week ratio of - 48% and a year-on-year ratio of - 35%. Among them, first tier cities: - 45% mom and - 8% YoY; Second tier cities: Mom - 48%, yoy - 37%; Third and fourth tier cities: Mom - 54%, yoy - 58%.
This week, the transaction area of second-hand houses decreased month on month and year-on-year. This week (from January 1 to January 8), a total of 960000 square meters of second-hand houses were sold in 17 cities, with a week-on-week ratio of - 38%, a week-on-week ratio of - 39%, a monthly cumulative year-on-year ratio of - 39% and an annual cumulative year-on-year ratio of - 39%. Among them, first tier cities: Mom - 43%, yoy - 19%, monthly cumulative yoy - 19%, and annual cumulative yoy - 19%; Second tier cities: Mom - 37%, yoy - 39%; Third tier cities: Mom - 23%, yoy - 81%.
Longhu group spun off its property management & commercial operation subsidiary and went public. ① On January 8, 2022, Longhu Zhichuang life (mainly engaged in property management and commercial operation), a wholly-owned subsidiary of Longhu group, submitted a prospectus to the Hong Kong stock exchange for listing on the main board of the stock exchange of Hong Kong. By the end of September 2021, Longhu Zhichuang has a living area of 237 million square meters, including 212 million square meters of residential and non-commercial areas and 24.28 million square meters of commercial (shopping centers & office buildings); The contract area is 349 million m3, and the contract / under management is 1.48 times. ② In 2021, the growth of management scale mainly benefited from M & A. From January to September 2021, Longhu Zhichuang life added 59.43 million m3 of under management area, of which 38.95 million m3 came from acquisition and M & A, accounting for more than 60% of the newly added area. ③ The commercial operation business developed rapidly in 2021, and the proportion of each item increased. From January to September 2021, the total revenue of Longhu Zhichuang life is 7.8 billion yuan, the gross profit is 2.1 billion yuan, and the gross profit margin is 27.6%; Among them, the proportion of commercial operation and property management revenue, the proportion of gross profit and gross profit margin were 23%, 29% and 35% respectively, which increased by 8.1pcts, 13.6pcts and 6.4pcts respectively compared with the same period in 2020.
The debt bearing acquisition of real estate enterprises is supported by banks, and the M & A loans are not included in the "three red lines". This week, the financial Associated Press reported that at present, the bank has informed some large high-quality real estate enterprises that the relevant M & A loans will no longer be included in the relevant indicators of the "three red lines" for the debt bearing acquisition of the projects of the enterprises in danger. We maintain our previous judgment that M & A in the real estate industry will occur, but there will be no large-scale M & a tide. We believe that the key to solving the liquidity crisis lies in the recovery of new home sales. From the sales data in the first week of January this year, the sales market has not stabilized yet. We expect that there will be greater efforts in the follow-up, and the policies will be issued before the Spring Festival to maintain the steady and healthy development of the real estate industry.
Investment advice
The real estate sector is optimistic about the head real estate enterprises with stable operation and the real estate enterprises with contrarian sales growth in 2021, such as Poly Developments And Holdings Group Co.Ltd(600048) and Greentown China. In the property sector, we believe that after the liquidity crisis of related real estate enterprises is lifted, private property companies have great flexibility in valuation repair, and recommend Jinke service, Jianye new life and country garden service.
Risk tips
The implementation effect of real estate improvement policies is less than expected; M & A integration is less than expected
