Market conditions:
This week (4.23-4.29), the A-share real estate index (Shenwan real estate) increased by – 0.96% (last week – 9.20%), and the A-share market (wandequan a) increased by – 1.56% (last week – 4.76%); The H-share real estate index (kroney real estate leading index) rose – 0.03% (last week – 9.43%), and the H-share market (Hang Seng Index) rose 2.18% (last week – 4.09%). This week, the performance of A-share real estate sector was stronger than the market, and the performance of H-share real estate sector was weaker than the market.
Industry fundamentals:
The epidemic continues to impact sales. From the data, the cumulative sales area of commercial housing in 45 cities (4.1 ~ 4.27) was – 50.8% year-on-year and – 41.6% year-on-year last month; The transaction area of second-hand houses in 16 cities (4.1 ~ 4.28) was – 29.9% year-on-year and – 30.3% year-on-year last month.
The decontamination cycle continues to rise. According to the data, the de commercialization cycle of commercial housing in 15 cities (as of April 28) was 832 days, compared with 652 days in the same period last month.
The land market is weak in supply and demand. According to the data, the cumulative land construction area of 100 large and medium-sized cities this year (as of 5.1) was – 42.8% year-on-year, and – 36.9% year-on-year last week; The premium rate of land transaction in 100 large and medium-sized cities (4.25 ~ 5.1) this week was 2.9% and 2.7% last week; The total land transaction price of 100 large and medium-sized cities this year (up to 5.1) was – 61.2% year-on-year, and – 53.1% year-on-year last week.
Great financing pressure. According to the data, the issuance scale of domestic real estate bonds (4.1 ~ 4.30) was – 49.8% year-on-year, and the scale of last month was – 41.4% year-on-year; The issuance scale of overseas real estate bonds (4.1 ~ 4.30) was – 56.1% year-on-year, and the scale of last month was 9.4% year-on-year; The scale of trust financing (4.1 ~ 4.30) accumulated – 78.8% year-on-year, and the scale of last month was – 84.7% year-on-year.
Investment strategy:
The Central Bureau of political support for the real estate industry will usher in the climax of the policy meeting to indicate the direction of the Central Bureau of political support for the real estate industry. On April 29, the Political Bureau of the CPC Central Committee held a meeting to analyze and study the current economic situation and economic work, “We should effectively manage and control key risks and keep the bottom line that there are no systemic risks. We should adhere to the positioning that houses are used for living rather than speculation, support all localities to improve real estate policies based on local conditions, support rigid and improved housing demand, optimize the supervision of commercial housing pre-sale funds, and promote the steady and healthy development of the real estate market.” The current policy tone and encouragement direction have been confirmed by the central government. The government’s determination to boost the market has been relatively clear. The introduction of real estate support policies will be more targeted. The financial support at both ends of supply and demand and the relaxation of purchase, sale and loan restrictions will be more active, and the industry will usher in the climax of policy support.
The recovery of sales is the cornerstone of the policy goal of “stabilizing land prices, house prices and expectations”. The support policy for house purchase will continue to be introduced until the current situation of sales stall and decline is reversed. The investment intention of real estate enterprises is essentially determined according to the sales expectation, and the sales intention of residents’ house purchase is often positively related to the heat of the market. The improvement of sales will promote the gradual stabilization of new construction and land acquisition, and the credit creation ability of real estate and the driving ability of upstream and downstream of the industrial chain will also be gradually restored. The recovery of real estate investment will also directly stimulate the recovery of demand in the upstream and downstream of the industrial chain, so as to effectively promote the healthy cycle of the national economy. We expect that with the decline of the epidemic and the intensive implementation of policies, sales will gradually pick up, and high-energy cities with good demand support will take the lead in recovering, while low-energy cities need stronger demand support policies and a longer effective period of policies.
We suggest that we gradually focus on the sector under the policy game β Income will be transferred to high-quality real estate enterprises benefiting from industry clearance and sales recovery α Income, strengthen the allocation of such real estate enterprises. At present, 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. The high-quality real estate enterprises with high credit can still achieve steady operation under the background of frequent thunderstorms, and can win the trust of buyers at the sales end; On the supply side, it can continuously obtain the financing support of financial institutions, and still has the ability to obtain land in the open market and acquire projects through M & A under the current market environment; In the process of the government promoting the rescue of private real estate enterprises, the central enterprises and state-owned real estate enterprises with high credit and the private leaders with steady operation also have the opportunity to undertake the core assets of the insured real estate enterprises and further integrate high-quality resources in the process of industry liquidation. Market reputation and operating strength have laid the cornerstone for the future development of high credit real estate enterprises. It is expected to seize the opportunity when the demand recovers and further improve the market share. Recommend China Vanke Co.Ltd(000002) , Poly Developments And Holdings Group Co.Ltd(600048) , Gemdale Corporation(600383) , and also suggest to continuously track the leading private real estate enterprises with stable operation, 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.
