Sales: the growth rate of volume and price continued to decline, and the local structure was weak and improved
From January to March, the sales area of commercial houses nationwide was – 13.8% year-on-year, with a decrease of 4.2pct compared with that from January to February, of which the sales area of residential houses decreased by 18.6%; The sales amount was – 22.7% year-on-year, with a decrease of 3.4pct compared with that from January to February, of which the residential sales decreased by 25.6%. In March, the sales area in a single month was – 2.29% month on month and – 17.7% year on year; The monthly sales amount was – 8.2% month on month and – 26.1% year-on-year, with a decrease of 6.9pct compared with that from January to February, and the monthly year-on-year was the lowest since March 2020; In March, the average monthly sales price was 9252 yuan / flat, with a month on month decrease of – 6.0% and a year-on-year decrease of – 10.3%, which was slightly narrower by 0.5pct compared with that from January to February. However, the average sales price was the lowest in recent two years, and the price reduction and inventory removal of real estate enterprises continued under the decline of sales.
Under the influence of high base pressure, the industry fundamentals are still in the bottom trend, but the overall decline of sales indicators is still within expectations. According to our monitoring, since the intensive loosening of local policies in February, the continuous decline of mortgage interest rate and the easing of liquidity have been superimposed (Central Bank: since March, due to the weakening of market demand, banks in more than 100 cities have lowered mortgage interest rates according to market changes and their own business conditions, with an average range of 20 to 60 basis points), The year-on-year decline in the sales area of 15 relaxed cities narrowed from – 45% in January to – 32% in March, better than other comparable cities in the same period. We believe that the loosening of local “four limits” has alleviated the pessimistic expectation of demand in some cities to a certain extent, and the regional market is expected to have a phased weak recovery. However, at present, the sustainability of the overall sales recovery still faces the test of unstable industry expectations, and the inflection point of fundamentals is still unclear. The follow-up recovery speed will depend on the continuity and follow-up of the underlying policy.
The growth rate of development investment fell, and the decline of land investment narrowed
From January to March, the completed amount of national real estate development investment was + 0.7% year-on-year, and – 2.4% year-on-year and – 8.5% month on month in March. The year-on-year growth rate was better than that in 2021q4, and the fundamental stall risk was controllable in the short term. Incremental end: 1) from January to March, the land purchase area was – 41.8% year-on-year, and the transaction price was – 16.9% year-on-year, with a year-on-year decline of 0.5pct and 9.8pct narrower than that from January to February, or driven by the first round of centralized land supply in hot cities; 2) New construction from January to march was – 17.5% year-on-year, with a decrease of 5.3pct compared with that from January to February. Stock side: 1) housing construction area from January to March + 1.0% year-on-year; 2) The completed area from January to march was – 11.5% year-on-year, with a decrease of 1.7pct compared with that from January to February. We believe that under the supervision and adjustment of completion guarantee and pre-sale funds, stock construction is still an important support for the development and investment of the whole year. At the same time, the increased willingness to sell high-quality plots in core cities is also expected to bring about the structural recovery of the land market. However, it is expected that the incremental development investment of real estate enterprises will continue to decline steadily before the arrival of a clear sales inflection point.
The decline of available funds accelerated, and the industry credit continued to be under pressure
From January to March, the funds in place of national real estate development enterprises were – 19.6% year-on-year, and the decline continued to expand by 0.2pct compared with that from January to February; March was – 23.0% year-on-year and – 48.2% month on month, both the largest decline since 2021. Among them: 1) sales collection: the deposit and advance payment from January to March were – 31.0% year-on-year, 37.5% year-on-year and – 47.4% month on month in March. The decline was large and lower than the growth rate of commercial housing sales in the same period, indicating that the overall market demand is still shrinking. From January to March, personal mortgage loans increased by – 18.8% year-on-year, by – 22.1% year-on-year in March, and by – 45.6% month on month, with negative year-on-year growth for three consecutive months, but the decline was less than that of deposit and advance collection, indicating that the mortgage environment remained loose. 2) China’s external financing ratio was – 29.65% year-on-year from March to may, with a year-on-year ratio of – 29.5% from March to May; From January to March, self raised funds were – 4.8% year-on-year, -2.3% in March and – 40.2% month on month. The recent easing at the financing end shows signs of diffusion from state-owned enterprises to high-quality private enterprises. A small number of high-quality private real estate enterprises are expected to restore refinancing and growth by virtue of flexible market-oriented mechanism. However, subject to the credit damage of large-scale private enterprises and the pressure of maturing debts, it is expected that the industry credit will still face great pressure in the first half of the year.
Grasp the merger and acquisition of the left side and the improvement of the concentration of the right side
In March, the industry fundamentals accelerated to the bottom, but the marginal improvement of the growth rate of new house sales price indicators in some cities shows that local urban implementation policies do have a certain bottom supporting effect. Referring to the phased weak improvement of 21q4 and the superimposed impact of the current epidemic and income expectation on demand, we believe that the policy effect needs to be continuously observed, the current policy strength may be difficult to establish the improvement trend, and more intensive urban implementation signals More relaxed policy measures and the driving effect of hot cities will jointly boost market confidence.
The future industry beta depends on the adjustment of industry structure, the pace of capacity clearing and the strength of policy support; Alpha focuses on the repair of the balance sheet and profit margin of key real estate enterprises by M & A, the accuracy of countercyclical plus leverage, and the long-term excavation of the value of housing scenarios. Continuous recommendation: 1) high quality leaders: Gemdale Corporation(600383) , Poly Developments And Holdings Group Co.Ltd(600048) , China Vanke Co.Ltd(000002) , Longhu group, China Merchants Shekou Industrial Zone Holdings Co.Ltd(001979) ; 2) High quality growth: Seazen Holdings Co.Ltd(601155) , Xuhui holding group; 3) Quality property management: Country Garden service, China Merchants Property Operation & Service Co.Ltd(001914) , poly property, Xuhui Yongsheng service. It is suggested to pay attention to: Beijing Capital Development Co.Ltd(600376) , Huafa Industrial Co.Ltd.Zhuhai(600325) , Financial Street Holdings Co.Ltd(000402) , Yuexiu real estate, China Construction Development International and other local state-owned enterprises.
Risk warning: industry credit risk spread; The downward cycle of industry sales begins; Maintain high pressure in administrative regulation;
