Key investment points
The central bank lowered the reserve requirement to support the real economy, and local governments continued to loosen the policy. 1) The central bank lowered the reserve requirement ratio: the central bank lowered the deposit reserve ratio by 0.25 percentage points, releasing a total of about 530 billion yuan of long-term funds. The RRR reduction is mainly to increase the support for small, medium-sized and micro enterprises and “agriculture, rural areas and farmers” seriously affected by the epidemic. For the real estate industry, the RRR reduction mainly plays a “positive signal” role, and the force of macro policies will have a positive effect on stabilizing the property market. However, to promote the recovery of real estate, the policy needs to further form a group effect through multiple places to improve the confidence of home buyers. 2) Government deregulation: since April, while continuing the overall easing trend of local real estate regulation, the policy deregulation has also been significantly strengthened. On the basis of the reduction of mortgage interest rate and the increase of loan amount, some cities have opened the policy of leniency in purchase and sale. Suzhou and Nanjing relaxed the “double limit” and expanded demand in order to boost suburban de urbanization. The time for social security certificate of house purchase in Suzhou is shortened, and the time for sales restriction of second-hand houses is shortened; The social security certificate requirement for the first house in some areas of Nanjing was cancelled.
In April, the cumulative sales area of 32 cities was – 48.4% year-on-year and – 10.5% month on month. According to the statistics of commercial housing transactions in 32 cities across the country, the cumulative transaction area in April (as of April 15) was – 48.4% year-on-year and – 10.5% month on month. Among them, the first tier cities were – 46.8% year-on-year and – 32.2% month on month; Second tier cities – 47.3% year-on-year and – 0.4% month on month; The third and fourth tier cities had a year-on-year increase of – 52.0% and a month on month increase of – 20.1%. First tier cities, except Shanghai, have warmed up to varying degrees, of which Shenzhen was + 56.9% month on month; Among the second tier cities in the statistics, Hangzhou, Wuhan, Qingdao, Suzhou, Nanning and other cities achieved positive growth month on month, of which Nanning was + 70.5% month on month; The performance of the third and fourth tier cities is different, and the performance of Changzhou, Jinhua, Nanping and other cities is relatively good.
The government and relevant institutions are expected to help real estate enterprises to bail out. 1) Jiangsu provincial government set up a fund to support Zhongnan group: according to financial institutions, Jiangsu provincial government, together with Nantong municipal government and Jiangsu Branch of China Huarong Asset Management Co., Ltd., established a 10 billion special enterprise relief fund in Nantong to help outstanding private enterprises represented by Zhongnan group tide over recent cash flow problems. 2) Jinke obtained the Chongqing rescue: it is reported that the Chongqing government has started to rescue Jinke since, specifically including the wholesale release of rescue funds, the leading state-owned enterprises in Chongqing to invest in Jinke, and the project companies that invest in Jinke in stages. 3) CITIC Trust helped resolve the risks of Evergrande Guangdong project: according to the China Securities News, CITIC Trust recently resolved the market-oriented risks through project land withdrawal in response to the “Jiahe No. 125 Evergrande trust plan”, which was voted by 86% of the beneficiaries. In this scheme, Guangzhou Urban Investment Group, an AAA high credit rating entity with strong performance ability, will be introduced as the guarantor to pay the full principal of the preservation trust plan in installments. If the above news can be successfully implemented, it will provide an important reference for the follow-up coordination led by the government and the realization of risk resolution of real estate projects through market-oriented methods. At the same time, it will also encourage relevant trusts and local governments to carry out relevant activities and explore new models of market-oriented risk resolution.
Investment suggestion: we think we should pay attention to four main investment lines at present: 1) development enterprises: Hangzhou Binjiang Real Estate Group Co.Ltd(002244) , Poly Developments And Holdings Group Co.Ltd(600048) , Seazen Holdings Co.Ltd(601155) , Oct a, China Resources Land, Longhu group, Vanke A, Xuhui holdings, China Construction Development International Holdings, Shenzhen New Nanshan Holding (Group) Co.Ltd(002314) , etc; 2) Property management enterprises: Country Garden service, China Resources Vientiane life, Jinke service, Xuhui Yongsheng service, etc; 3) Track transformation Enterprises: Tianjin Guangyu Development Co.Ltd(000537) , Lushang Health Industry Development Co.Ltd(600223) etc; 4) Real estate brokerage Enterprises: shells, etc.
Risk tips: project delivery risk, project sales collection risk, industry policy regulation risk
