Main points
Market Review
Last week (April 11-april 15, 2022), the Shanghai Composite Index fell 1.25%, the Shanghai and Shenzhen 300 index fell 0.99%, and the real estate sector fell 2.90%. The real estate sector lost 1.65 percentage points to the Shanghai Composite Index and 1.91 percentage points to the Shanghai and Shenzhen 300 index. A-share real estate companies focused on Financial Street Holdings Co.Ltd(000402) ( Financial Street Holdings Co.Ltd(000402) . SZ), Poly Real Estate ( Poly Developments And Holdings Group Co.Ltd(600048) . SH) and China Merchants Shekou Industrial Zone Holdings Co.Ltd(001979) ( China Merchants Shekou Industrial Zone Holdings Co.Ltd(001979) . SZ) increased significantly, up 7.41%, 6.10% and 4.48% respectively. Midea real estate (3990. HK), Zhongjun Group Holdings (1966. HK) and China Overseas Development (0688. HK), which are H-share real estate companies that focus on, led the gains, with increases of 2.89%, 2.42% and 1.50% respectively
Industry news
The central bank comprehensively lowered the reserve requirement and released 530 billion funds. On the evening of April 15, the people’s Bank of China announced that in order to support the development of the real economy and promote the steady decline of comprehensive financing costs, it decided to reduce the deposit reserve ratio of financial institutions by 0.25 percentage points on April 25, 2022 (excluding financial institutions that have implemented the deposit reserve ratio of 5%).
Suzhou adjusted the sales restriction policy. From April 11, 2022, Suzhou began to adjust the sales restriction policy. The sales restriction of second-hand houses was changed from 5 years to 3 years. The contracted second-hand houses can be transferred after three years from the date of obtaining the real estate.
Kunming issued opinions on promoting the stability of land price and house price in the real estate market. Relevant policies are formulated from eight aspects: accelerating the de commercialization of commercial housing, making rational use of commercial land, and alleviating the difficulties of real estate development enterprises during the epidemic.
Investment advice
The credit environment still needs to be improved, market confidence needs to be continuously repaired, the Matthew effect of capital is prominent, and enterprises with low financing cost and land acquisition advantage may benefit. Relevant targets: (1) leading real estate enterprises with low financing cost and can continuously obtain land in first and second tier cities, such as Poly Developments And Holdings Group Co.Ltd(600048) ( Poly Developments And Holdings Group Co.Ltd(600048) . SH), green city China (3900. HK), Longhu group (0960. HK), etc; (2) Real estate enterprises that are less affected by the “two concentration” land policy and have diversified land acquisition methods, such as Seazen Holdings Co.Ltd(601155) ( Seazen Holdings Co.Ltd(601155) . SH), Baolong real estate (1238. HK), etc; (3) Leading enterprises in the property management industry and enterprises that layout high-quality segments of the property management industry, such as Country Garden Service (6098. HK), Xincheng Yue service (1755. HK), China Resources Vientiane life (1209. HK), Baolong Commerce (9909. HK) and Xingsheng Commerce (6668. HK).
Risk tips
Tightening of real estate regulation policies; Real estate sales fell short of expectations.
