Core view
The central bank issued a voice to increase financial support for real estate, and the supply side expectation was gradually fulfilled. At present, the downward trend of industry fundamentals continues. Since April, the sales area of high-frequency data in key cities has decreased by 53.2% year-on-year, and the decline has continued to expand. Recently, under the framework of urban implementation, demand side support policies have been accelerated. Taizhou, Longyan, Yancheng and Suzhou have reduced the down payment ratio and increased the loan amount at the provident fund level. Housing loan interest rates in many places in Guangdong and around Beijing have been reduced. Recently, the policy introduction intensity under the framework of urban policy implementation has increased significantly, and the scope of cities involved has been further extended to some second tier cities, but generally speaking, the scope and intensity of easing still have great room for improvement.
This week, the central bank issued a voice to increase financial support for the real estate sector, proposed to implement differentiated housing credit policies, reasonably determine the minimum down payment ratio and minimum loan interest rate requirements for commercial loans, further clarify the attitude of increasing support on the demand side, and increase support for high-quality projects on the supply side, do not blindly withdraw loans, cut off loans and suppress loans, and maintain the stable and orderly release of real estate development loans, It was also reported that the central bank convened 6 major banks, 12 joint-stock banks and 5 major AMCs to hold a special meeting on the rescue and M & a business of 12 problematic real estate enterprises. Recently, the relevant liquidity support for the risk level of real estate enterprises has gradually formed a plan. We believe that the implementation of the relief policy on the supply side is imminent, and the recent financing support for real estate enterprises in distress is expected to be gradually realized. The proportion of fund allocation continued to rise. In 2022, the total market value of public fund positions in Q1 real estate sector was 128.04 billion yuan, an increase of 16.6% month on month, and increased month on month for three consecutive quarters. The market value of positions in the real estate sector accounted for 2.12% of the market value of stock investment, up 0.56 percentage points month on month. The proportion of positions has rebounded for three consecutive quarters since Q2 bottomed in 2021. We believe that there is still room for improvement in the scope and intensity of policy easing, and the proportion of sector allocation is expected to further increase.
As the policy strength and scope under the framework of urban implementation policy are expected to be further released, the real estate sector will continue to benefit from the valuation and repair dividend in the second quarter. All indicators of the industry showed a downward trend in the first quarter. Superimposed on the impact of the spread of the epidemic on the overall economy, the pressure on the annual economic growth target increased sharply. Therefore, the policy level at both ends of real estate supply and demand still needs to be further strengthened and relaxed. Recently, the policy introduction intensity under the framework of urban policy implementation has increased significantly, and the scope of cities involved has been further extended to some second tier cities, but generally speaking, the scope and intensity of easing still have great room for improvement. At the same time, the central bank and the State Administration of foreign exchange proposed on April 18 to implement differentiated housing credit policies, reasonably determine the minimum down payment ratio and minimum loan interest rate requirements of commercial individual housing loans within their jurisdiction, and further clarify the attitude of continuing to increase the support on the demand side. For the supply side, under the background of Limited sales collection and no fundamental improvement in financing, Real estate enterprises still need more targeted rescue policies to cope with the upcoming debt repayment peak. From an overall perspective, the policy tools for real estate will be further improved with the continuous bottoming of economic fundamentals.
We continue to recommend development categories: China Vanke Co.Ltd(000002) , Poly Developments And Holdings Group Co.Ltd(600048) , Gemdale Corporation(600383) , China Merchants Shekou Industrial Zone Holdings Co.Ltd(001979) , China overseas development, Xuhui holding group; Property management: China Merchants Property Operation & Service Co.Ltd(001914) , country garden service, poly property, Xuhui Yongsheng service, xinchengyue service.
