What obstacles are encountered in this round of valuation repair
In each round of real estate stock market, the policy direction basically determines the starting point of valuation repair, the policy strength determines the valuation elastic space, and the policy effect determines the duration and end range. The end of 21q3 real estate policy has emerged. This round of valuation has continued so far. The policy direction game has realized a relatively obvious valuation premium in the secondary market, that is, the policy environment of one-way game we mentioned many times before. However, the strength of the policy (structural relaxation or systematic relaxation) and the effect of the policy (whether the company's fundamentals usher in a strong cycle or weak improvement) determine the rationality of the expected response to the valuation. At present, these two differences are still relatively large, which may lead to the periodic hesitation of the valuation repair of the sector.
The strength of policy depends on the current situation of fundamentals and regulation objectives
The difference of industry fundamentals data from January to march is basically within expectations. However, the uncertainty is more at the level of policy objectives: the standard of industry soft landing is vague, and the demand of the 5.5% growth target for real estate is also relatively vague. Therefore, the corresponding policy critical point and threshold are also non quantifiable. We believe that the current policy attitude is still to seek a more extreme tight balance or ideal state (moderate adjustment of the industry, stable return, benign and stable clearing of production capacity), and we are sure to control the clearing risk. However, for the highly leveraged and uncontrollable real estate industry, whether there is such a just good state may be debatable (or it needs repeated adjustment and correction of policies). It is difficult for us to predict. We can only look at it step by step. The probability is that it may be further changed only at an unbearable stage, that is, the real inflection point of this round of policies that we have always emphasized is on the right side of the fundamentals.
The effect of policy depends on the accumulation of real demand
The differences of policy effects mainly lie in: 1) whether the tolerance of house prices will be improved (we assume that the control will not be liberalized). After losing the guidance of the wind vane of house prices in core cities, whether the comprehensive easing of the second, third and fourth lines can stabilize the fundamentals is also an unprecedented problem; 2) How much real demand is there, that is, how much the fundamentals can be improved after the relaxation of purchase and loan restrictions. We believe that the policy still has a certain supporting effect in the short term, but the strength and sustainability are uncertain, especially under the impact of external variables such as epidemic, unemployment and income expectation on Residents' cash flow, it is difficult to form Periodic improvement. We believe that there is room for policy expectations to be fulfilled, which may be a pulse improvement in about a quarter. The more important significance is to avoid the negative feedback decline of market expectations. However, the continuous improvement of market confidence still needs more intensive urban policy signals, looser policy scales and the driving effect of hot cities.
Evaluate the match between expectation and reality through valuation
From the dynamic point of view, we believe that the leading roe is expected to maintain the current historical low level of 15% in the next five years. Under the optimistic assumption, 8-10xpe corresponds to PB1 In the range of 2-1.5x, there is still more than 20% space compared with the current valuation, but the continued upward depends on the proof of roe ability, the improvement of PE brought by the stability of policy sentiment and industry structure. From a static point of view, we believe that the pessimistic expectation of Pb 1 response of some real estate enterprises lies in: 1) inventory impairment; 2) The de commercialization of sales slowed down and the discount cost increased; 3) The leverage is high, and the capital cost eats back the profit space; 4) The management and turnover capacity of the company is poor. As of April 21, there were 45 mainstream A-share listed real estate enterprises with Pb 1, the median valuation of Pb (MRQ) was 0.72, and the corresponding inventory falling price range was - 8.3%. Pb is highly sensitive to inventory value. Fundamentals, especially the marginal change of price, have a great impact on the expected net asset valuation of highly leveraged real estate enterprises. We believe that under the expectation of loose policy, if the fundamentals can achieve real improvement, there is still room for follow-up repair of high-quality and undervalued real estate enterprises.
Strategy: grasp the beta of structural easing and the alpha of M & A
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 decline of industry sales exceeded expectations; Because the implementation of urban policies is less than expected; Subjective measurement risk
