Matters:
1) Kerui released the sales data of the top 100 real estate enterprises in April 2022.
2) the Politburo meeting on April 29 stressed the need to effectively control key risks and hold the bottom line of 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.
Ping An View:
The sales decline of the top 100 continued, and there was differentiation among real estate enterprises: the purchase mood was depressed, superimposed on the impact of epidemic closure, and the sales of the top 100 real estate enterprises were further under pressure in April. The monthly sales volume was 492.4 billion yuan, a year-on-year decrease of 59.2%, and the sales area was 31.87 million square meters, a year-on-year decrease of 60.7%, an increase of 6.6 and 3.5 percentage points compared with March. Affected by this, the cumulative decline in sales and sales area of the top 100 real estate enterprises from January to April expanded to 50.5% and 52.3%. From the perspective of specific real estate enterprises, country garden’s full caliber sales from January to April were 163.4 billion yuan, leading real estate enterprises. Among the 33 real estate enterprises under key monitoring, the monthly sales of 6 enterprises decreased by less than 40%, namely Yuexiu real estate (+ 39.7%), Hangzhou Binjiang Real Estate Group Co.Ltd(002244) (- 4.8%), China Overseas Development (- 25.2%), COSCO Group (- 27.1%), Beijing Capital Development Co.Ltd(600376) (- 35.3%), China Vanke Co.Ltd(000002) (- 36.7%); Yuexiu real estate, COSCO Group, Huafa Industrial Co.Ltd.Zhuhai(600325) , Beijing Capital Development Co.Ltd(600376) , Poly Developments And Holdings Group Co.Ltd(600048) from January to April, the cumulative sales growth rate was – 24.6%, – 28%, – 29.4%, – 29.8% and – 30.9% respectively.
The meeting of the Political Bureau emphasized the support for improvement, and the space for administrative regulation and pre-sale fund supervision and optimization was further opened: in the policy direction, the tone of “housing without speculation” remained unchanged, but the meeting of the Political Bureau also stressed that “support all localities to improve real estate policies from local realities” and “support rigid and improved housing demand”, and the space for urban implementation was further opened. Previously, after the meeting of the financial committee of the State Council on March 16, the pace of local policy adjustment was significantly accelerated, and showed the characteristics of diffusion from low-energy cities to high-energy cities, and the extension from provident fund quota adjustment and house purchase subsidies to purchase, loan and sales restrictions. In the follow-up consideration, the pressure of industry development is still on, and the local real estate optimization policies are expected to be introduced one after another. With the effective prevention and control of the epidemic, the real estate market in core cities may take the lead in stabilizing. In addition, the Politburo meeting emphasized “optimizing the supervision of commercial housing pre-sale funds” for the first time, indicating that the poor capital flow caused by the excessive management of pre-sale funds in some cities has attracted attention, and the subsequent standardized supervision will help to moderately alleviate the cash flow pressure of real estate enterprises.
Investment suggestion: in April, the sales of the top 100 real estate enterprises continued to be depressed, and the market confidence has not been fundamentally repaired. The statement made at the Political Bureau meeting at the end of the month is relatively positive, and the optimization space for administrative regulation and pre-sale fund supervision is further opened, which helps to promote the gradual improvement of the market, but the degree of repair still depends on the effective control of the epidemic situation and the implementation of policies. In terms of investment suggestions, the valuation repair driven by short-term policies is expected to continue; Under the optimization of medium and long-term industry pattern, the market share and profitability of brand real estate enterprises with financing and control advantages are expected to improve. The development sector is mainly concerned about: one is the strong operating and high credit enterprises with relaxed short-term benefit policies and improved gross profit margin at the land acquisition end, which are expected to seize market share in the medium and long term, such as Poly Developments And Holdings Group Co.Ltd(600048) , China Vanke Co.Ltd(000002) , Gemdale Corporation(600383) , China Merchants Shekou Industrial Zone Holdings Co.Ltd(001979) , Hangzhou Binjiang Real Estate Group Co.Ltd(002244) , etc; One is the subject matter of policy game elasticity with certain support for Fundamentals, such as Seazen Holdings Co.Ltd(601155) , Jinke Property Group Co.Ltd(000656) , Jiangsu Zhongnan Construction Group Co.Ltd(000961) , etc. The property management department suggests paying attention to country garden service, poly property, China Merchants Property Operation & Service Co.Ltd(001914) , Jinke service, xinchengyue service, Xingsheng business, etc.
Risk tips: 1) the effect of policy implementation is less than the expected risk; 2) Large scale impairment risk of real estate enterprises; 3) The newly added soil storage is insufficient, the supply scale of the industry is reduced, and there is a risk of damage to short-term development.
