Core view
Market review this week. In the 15th week, the real estate sector index was weaker than the CSI 300 index and stronger than the gem index. The relative return of the real estate sector compared with the CSI 300 index was -1.9. The CSI 300 index closed at 418875, with a weekly increase of – 1.0%; The gem index closed at 246036, with a weekly increase of – 4.3%; The real estate sector index closed at 368571, with a weekly increase of – 2.9%.
Industry highlights this week. The central bank released financial statistics for the first quarter and announced a 0.25 percentage point reduction in the deposit reserve ratio of financial institutions on April 25. The Bureau of statistics released the national CPI and PPI data and 70 city house price index in March. CSRC and other three departments: support listed real estate enterprises to actively transform to a new model. Kunming issued a new real estate policy. The first batch of land supply in Changsha was 22, and the reserve price was 19. The Shanghai Stock Exchange solicited public opinions on the raising rules of infrastructure REITs.
Sales of new houses and second-hand houses this week increased compared with last week. In the 15th week, the sales of new houses in 29 major cities was 21000, an increase of 16.7% over the 14th week; The sales of second-hand houses in 11 major cities were 9000 units, an increase of 53.8% over the 14th week; Compared with the 14th week, the growth rates of new housing and second-hand housing transactions in first tier cities were 24.4% and 67.6% respectively; Compared with the 14th week, the growth rates of new housing and second-hand housing transactions in second tier cities were 16.0% and 50.4% respectively. The inventory was flat, and the inventory sales increased compared with last week. As of the 15th week, the inventory in 15 major cities was 1222000 sets, basically the same as that in the 14th week; The stock to sales ratio was 18.8 months, an increase of 0.3 months over the 14th week. The number of land market transfers increased compared with last week. In the 15th week, a total of 2 pieces of land were sold in 26 big cities. The amount of land transfer increased. In the 15th week, the land transfer fee of 26 major cities was 2.14 billion yuan, an increase of 1.56 billion yuan compared with the 14th week. The average premium rate rose. In the 15th week, the average premium rate of land transactions in 26 major cities was 1.0%, up 1.0% from the 14th week.
Announcement of key companies Cccg Real Estate Corporation Limited(000736) , Grandjoy Holdings Group Co.Ltd(000031) and other companies published the annual report of 2021. Many enterprises such as China Resources Land and Longhu group released the operation data of March / first quarter of 2022. China Resources Land, Jindi, Xuhui and other companies competed for the plot China Merchants Property Operation & Service Co.Ltd(001914) return the land use right of Tianjin Economic Development Zone project. Jinke group withdrew its investment in Chongqing Jinke Junyao.
Investment proposal and investment object
This week, the central bank comprehensively lowered the reserve requirement, which was lower than expected, and the interest rate cut failed again; Although the sales of new and second-hand houses have improved slightly, it is expected that the downward trend of fundamental inertia under the existing policies will be difficult to reverse. It is still necessary to observe the greater policy loosening after the release of Q1 economic data. Combined with the previous statements of many ministries and commissions, we believe that regulators are not willing to resolve the problem entirely through demand stimulus. Based on this decision logic, the policy will eventually show an average force at both ends: the supply side will promote the problem real estate enterprises to sell the projects at a significant discount, and the state-owned enterprises and high-quality private enterprises will take over the projects; On the demand side, some cities with little upward pressure on house prices can further relax regulation. The final result is that the owner’s equity of the problem real estate enterprises has been lost, the creditors have suffered a certain degree of loss on average, and the resident Department has slowly increased a certain degree of leverage. Under this framework, looking for marginal real estate enterprises is not a good strategy. Problematic real estate enterprises will lose capital on a large scale and completely lose the ability to add leverage in the future. We suggest the balanced allocation of first-line leaders and some high rated flexible targets. We are optimistic about the first-line leaders with stable performance, and recommend Vanke A ( China Vanke Co.Ltd(000002) , buy), Poly Developments And Holdings Group Co.Ltd(600048) ( Poly Developments And Holdings Group Co.Ltd(600048) , buy); Second tier leaders with flexible performance are recommended Gemdale Corporation(600383) ( Gemdale Corporation(600383) , buy) and Longhu group (00960, buy). At the same time, we are optimistic about the property management and business management industry with rapid growth and less credit damage. We recommend Country Garden Service (06098, buy), poly property (06049, buy), China Merchants Property Operation & Service Co.Ltd(001914) ( China Merchants Property Operation & Service Co.Ltd(001914) , overweight), New Dazheng Property Group Co.Ltd(002968) ( New Dazheng Property Group Co.Ltd(002968) , buy), rongchuang service (01516, buy) and Xingsheng Commerce (06668, buy).
Risk tips
Sales were significantly lower than expected. The counter cyclical policy was less than expected. Interest rates have risen significantly.
