Sales: the decline of commercial housing sales expanded, and the average sales price decreased significantly. In March, the sales area of commercial housing was - 17.7% year-on-year, with the former value of - 9.56%; The year-on-year sales volume was - 26.16%, and the previous value was - 19.28%; The average sales price was -10.28% year-on-year, and the previous value was -10.74%. We believe that the superposition of several major factors has led to the rapid decline of demand: 1) the frequent credit crisis of real estate enterprises has shaken the confidence of buyers in the timely completion and delivery of future houses, and then affected the sales; 2) Under the price reduction and promotion of real estate enterprises, the psychology of "buying up but not buying down" led to the further aggravation of wait-and-see mood; 3) Under the background of economic recession, the weakening of income expectation has restrained some house purchase demand. 4) The impact of the epidemic affected the development of sales and the release of demand. 5) The expectation of the pilot real estate tax has also restrained the residents' willingness to buy a house to a certain extent.
Development Investment: the investment turned negative again, and the commencement and completion accelerated the decline. In March, the newly started area was - 22.24% year-on-year, and the previous value was - 12.15%; The completed area was - 15.50% year-on-year, and the former value was - 9.8%; The development investment was -2.39% year-on-year, and the former value was 3.67%. We believe that the combination of tight financing and falling sales volume and price has further impacted the liquidity of real estate enterprises and greatly affected their investment ability and willingness. Since the end of March, the epidemic of continuous fermentation across the country has also inhibited the resumption of construction and investment. From the data, the decline of investment is much lower than that of sales and new construction. This is mainly because the "guaranteed delivery" has promoted the resumption of construction and production of real estate projects suspended in the early stage; The land purchase cost incurred in the early stage is gradually included with the real estate construction; The rising cost of construction and installation caused by the rising price of raw materials. However, the relative stability of investment data is difficult to cover up the current market decline. Under the sluggish sales and weakening expectations, the land market is experiencing a sharp decline, and the continuous sharp decline of land transactions is bound to bring great pressure to the construction and investment data in the future.
Funds in place: funds are becoming more and more tense, and the decline in sales is the biggest obstacle to the improvement of funds. The funds in place in March were - 23.0% year-on-year, and the previous value was - 17.73%. The pressure brought by the decline in sales still makes it difficult to improve the capital of the industry. The decline in deposits, advance receipts and personal mortgage loans both expanded, indicating that there is a great pressure on sales collection at present. Although the financing side policy is constantly making efforts, the liquidity problems of private real estate enterprises and the volume and price of the market have had a negative impact on the confidence and action of financial institutions. The financing side support is mainly concentrated in high credit central enterprises and state-owned enterprises. At present, many private enterprises are still facing great liquidity risk under the dual pressure of lack of financing ability and sales collapse.
Investment suggestions:
Under the impact of shrinking demand and weakening expectation, both sides of supply and demand are facing great impact. The policy objective of "stabilizing land prices, house prices and expectations" will face great challenges. It is still a top priority to further strengthen market stability. The relaxation of purchase, loan and sale restrictions in more cities and the further decline of mortgage interest rates have gradually become a realistic choice. According to the data of the Bureau of statistics, the decline in sales continued to expand, and residents' willingness to buy houses was low. The capital of the industry is still very tight, the investment willingness and ability of real estate enterprises have declined sharply, and the land market is deserted. The impact of the epidemic has expanded since the end of March. Combined with the observation of high-frequency data, the data in April is still not optimistic.
We believe that the central government's attitude towards real estate regulation has changed significantly, and the policy tone has gradually shifted from correction at the end of last year to support. With the current clear policy tone and encouragement direction, monetary policy and local regulation are expected to continue. Although the high-frequency data shows that the current market sales are still continuing to decline, with the release of the policy, some cities have shown signs of recovery. Although the recent multi-point outbreak of the epidemic may affect the appearance of the policy effect, the government's determination to boost the market has been relatively clear. With the gradual appearance of the policy effect at both ends of supply and demand, the recovery of industry sales has been gradually approaching.
In the short term, with the release of policies and the improvement of support expectations, the industry policy atmosphere is relatively friendly during this period, and there will be a big game in the market for the reduction of default risk of private enterprises. However, many low credit private enterprises with high risk still face great liquidity pressure, which may be difficult to support until the market warms up; Moreover, frequent negative news and almost lost land acquisition ability have also greatly damaged the market reputation and future development space of the enterprise. Therefore, we believe that in the long run, holding high credit real estate enterprises is a more stable strategy. Under the industry background of frequent thunderstorms in various enterprises, at the sales end, high credit real estate enterprises can win the trust of home buyers; On the supply side, high credit real estate enterprises continue to obtain financing support from financial institutions, and still have the ability to obtain land in the open market and acquire projects through mergers and acquisitions in the current market environment. Market reputation and business strength have laid the foundation for future development.
Looking back on history, in the early stage of policy loosening, with the release of policies and the improvement of support expectations, the policy game dominated and the sector tended to β Significant gains. With the gradual appearance of the effect of administrative policy and monetary policy, seize the opportunity of industry recovery, and the more top-notch real estate enterprises began to walk out of the market α profit. We believe that the advantages of financing will promote high credit real estate enterprises to gain advantages in the land and M & a market. The continuous land acquisition and promotion ability and high-quality credit endorsement are also expected to seize the opportunity when the demand recovers and further improve the market share. Recommended China Vanke Co.Ltd(000002) , Poly Developments And Holdings Group Co.Ltd(600048) , Gemdale Corporation(600383) . The support from the financing side, after meeting the steady central enterprises and real estate enterprises in the head, will gradually overflow to the stable private enterprises, and the market will gradually restore confidence in the stable private enterprises. It is suggested to continue to track the leaders of the stable private real estate enterprises, such as Longhu group and country garden.
Risk tip: the risk that the implementation of industrial policies is less than expected, the risk that profitability continues to decline, and the risk that sales are less than expected.
