Core view
Compared with last week, the turnover of new houses and second-hand houses decreased this week. This week, the number of new houses sold in 47 cities was 35000, down 45.5% month on month and 37.9% year-on-year; The number of new houses sold in 18 large and medium-sized cities was 23000, down 41.8% month on month and 35.3% year-on-year; 1、 The number of new houses sold in the second and third tier cities changed by – 28.3%, – 48.2%, – 32.9% month on month and – 6.8%, – 32.0%, – 72.2% year on year respectively. The number of second-hand housing transactions in 16 cities was 8000, down 41.3% month on month and 49.7% year-on-year; The number of second-hand housing transactions in 12 large and medium-sized cities was 7000, down 44.6% month on month and 48.2% year-on-year; 1、 The number of second-hand housing transactions in second and third tier cities increased by – 52.3%, – 44.1% and – 17.7% month on month respectively, and the year-on-year growth rates were – 35.6%, – 53.3% and – 49.8% respectively.
Compared with the previous week, the inventory of new houses decreased, and the decontamination cycle increased. The inventory of new houses in 15 cities was 1.034 million, a month on month decrease of 14000, and the decontamination cycle was 11.1 months, an increase of 0.1 months; The inventory of new houses in 8 large and medium-sized cities was 564000, a month on month decrease of 13000, and the decontamination cycle was 7.8 months, a month on month decrease of 0.1; The inventory of new houses in the first tier cities was 265000, with a month on month decrease of 12000. The deconvolution cycle was 7.3 months, with a month on month decrease of 0.4 months. The inventory of new houses in the second tier cities was 208000, with a month on month decrease of 11000, with a deconvolution cycle of 9.2 months, with a month on month increase of 0.3 months. The inventory of new houses in the third tier cities was 91000, with no significant change on a month on month basis. The deconvolution cycle was 7.1 months, up 0.2 months on a month on month basis.
The overall land market fell in volume and price compared with last week, and the land premium rate increased. The number of all types of land traded in Baicheng was 182, down 69.8% month on month and 85.4% year-on-year; The planned construction area of the land traded was 15.31 million square meters, a month on month decrease of 72.1% and a year-on-year decrease of 83.2%; The total land transaction price was 25.7 billion yuan, down 89.1% month on month and 87.6% year-on-year; The average floor price of land traded was 1676 yuan / m2, down 61.1% month on month and 26.4% year-on-year; The land premium rate of Baicheng was 4.40%, up 40.6% month on month and down 55.9% year-on-year.
Investment advice
Following the central bank’s China Banking and Insurance Regulatory Commission’s explicit proposal in December to support the project acquisition and merger of real estate enterprises and increase the support for bond financing, the associated press of Finance and other media reported rumors related to acquisition and merger this week; At the same time, the Guangdong provincial government convened a docking and exchange meeting between high-quality real estate enterprises and out of danger real estate enterprises. We believe that the current industry clearing is still accelerating, and the project collection and acquisition between real estate enterprises is one of the effective means for some real estate enterprises to resolve the liquidity crisis and orderly industry integration. Recently, it has been mentioned many times, which has also played a positive effect on the recovery of market confidence, but in fact, most of the acquirers and M & A parties are in the early communication stage of the project. On the one hand, the matching degree of supply and demand between the two sides of the transaction is not high. The acquirer (mostly central state-owned enterprises) hopes to find high-quality projects with high cost performance, while the acquiree (mostly private enterprises) has many considerations about the saleable projects, and it is difficult to reach an agreement on the pricing of the projects. On the other hand, as the risks in the real estate industry have not been completely cleared, some banks still hold a wait-and-see attitude towards real estate loans such as M & A loans. Therefore, we believe that we do see the marginal relaxation of M & A in the near future, but it still needs some time and conditions to really play a role. Before the policy is officially implemented, the industry will further promote the convergence of various resources to high-quality leading real estate enterprises in the process of gradual liquidation. High quality leading real estate enterprises with smooth financing channels and outstanding comprehensive ability still enjoy higher valuation premium at this stage; If the relaxation of relevant policies is substantially confirmed, the insured real estate enterprises of the acquired project will benefit from the accelerated pace of asset disposal and risk resolution. From the perspective of real estate fundamentals, with the arrival of the bottom area of Q1 sales, the fundamentals will rebound, and the investment may bottom out in Q2 and begin to improve. From the perspective of sector investment, we still believe that there is a good allocation window in the first quarter, the expectation of policy improvement is still strengthened, and the industry beta market after policy repair is worthy of attention. At that time, the valuation of second-line real estate enterprises with greater flexibility may be improved. In the short term, it is still recommended to pay attention to the head real estate enterprises. We suggest to pay attention to: 1) development sector: Poly Developments And Holdings Group Co.Ltd(600048) , Gemdale Corporation(600383) , China Merchants Shekou Industrial Zone Holdings Co.Ltd(001979) , China Vanke Co.Ltd(000002) , Longhu group and China Resources Land. 2) Property sector: Country Garden service, Xuhui Yongsheng service, China Resources Vientiane life.
Risk tips
Real estate regulation continues to upgrade; Sales fell more than expected; Financing continued to tighten.
