Policy: this week, favorable policies for real estate emerged frequently from top to bottom. The meeting of the Political Bureau of the CPC Central Committee clarified the direction of real estate policy, proposed to support the demand for rigid and improved housing and the optimization of pre-sale fund supervision, comprehensively set the tone at both ends of supply and demand, relaxed the trend of this cycle, and proposed to "stabilize the economy" and strive to achieve the GDP target. At the local level, this week, Guiyang, Wuxi and Lanzhou successively issued a combination of policies at both ends of supply and demand to relax regulation, and Dongguan, Zhongshan and Foshan relaxed purchase restrictions. We believe that real estate, as an important stabilizer of the economy, is very important to stabilize the economy. The meeting of the Political Bureau of the CPC Central Committee gave clear guidance on the relaxation direction of real estate. The relaxation around reasonable demand will be accelerated from point to surface, and the "four limits" policy will be relaxed due to the implementation of urban policies. In addition, the central government also proposed to optimize the pre-sale supervision policy. We believe that the relaxation of the supply side policy will benefit the real estate enterprises that have been over corrected by the pre-sale capital supervision, which will help to alleviate the problem of excessive capital repression in the short term.
Fundamentals: this week, the transaction area of new houses in 30 cities in China continued to increase month on month, but the total amount is still at a historical low; The transaction area of second-hand houses in 18 cities in China increased month on month, narrowed year-on-year, and showed a recovery trend; In terms of the land market, the land transaction area of 100 cities nationwide increased and decreased last week, and the overall performance became colder. Transactions in some core cities were hot. For example, eight homesteads in Shenzhen were traded at the top price, which was driven by profits, that is, the government adjusted the land auction mechanism to further transfer profits to real estate enterprises.
The performance of major real estate stocks was weaker than that of major real estate stocks this week; In terms of property, Hang Seng's property services and management outperformed the market by 1.32pct, and the share prices of most key targets rose.
This week's view: this week, we released the in-depth report "Research Series 1 on the new cycle of real estate: how to judge the regulation and market sustainability when the belt is getting wider and wider, From the industry law, policy law and market law, this paper deeply analyzes the trend of real estate policy, demand repair and the sustainability of beta market. Different from the previous three cycles, the policy relaxation in this cycle is mainly concentrated at the local level, and it will not enter the relaxation of purchase and loan restrictions until March 2022. In addition, this round of policy regulation also extends to the supply side, and the liquidity crisis of real estate enterprises also has a negative effect on the demand side. The point like outbreak of the national epidemic has also delayed the emergence of the demand inflection point. At present, the fundamental repair is weak and tends to stabilize month on month, but it is still in a downward range year-on-year. The fundamental repair is less than expected, forcing the policy to relax faster and improve the level. Policy expectation is the core factor that determines the opening of the sector market. In the first three rounds of cycles, the relaxation policy at the central level started the real estate sector market at the same time. Although the central government made few statements in the early stage of this round, causing the market to hesitate about the expectation of policy relaxation, this week's meeting of the Political Bureau of the CPC Central Committee set the direction of real estate relaxation, and the subsequent uncertainty of policy deregulation in various regions was strengthened. We believe that the beta market of the sector is expected to accelerate. There is often a turnaround in the middle of the beta market, but the end signal of this round of market has not been sent. In the history of resumption, the end sign of the three rounds of sector cycle is the same as that of the sector. When the house price increases at the same time for the first time in this cycle, the policy tightening expectation is strengthened, and the sector market comes to an end. At present, house prices are still in the downward channel. There is no need to worry that the tightening of policies in the short term will lead to the end of the beta market of the sector. It is difficult to repair the demand affected by the epidemic this year. It is expected that there will be an obvious inflection point in the demand at the end of Q3 or Q4. Before the inflection point in the demand, the tortuous upward trend of the real estate market will remain unchanged.
Investment suggestions: 1) high credit real estate enterprises have prominent advantages in financing, debt structure, operation and management, and have strong certainty of follow-up development. Q2 callback of high-quality enterprises is an opportunity. Continue to be optimistic about a - Poly Developments And Holdings Group Co.Ltd(600048) , China Merchants Shekou Industrial Zone Holdings Co.Ltd(001979) , China Vanke Co.Ltd(000002) , Gemdale Corporation(600383) ; H – China overseas development, China Resources Land and Longhu group. 2) In terms of the long-term cycle, the current cycle regulation is different from the past. The Regulation Policy extends to the supply side, and the K-type differentiation is more significant in this cycle. Continuous recommendation of second tier dark horse: Huafa Industrial Co.Ltd.Zhuhai(600325) , Hangzhou Binjiang Real Estate Group Co.Ltd(002244) ; Greentown China, Yuexiu real estate, China Construction Development International, China Jinmao. 3) The direction of policy relaxation is clear, and the target selection can sink moderately. The stabilization of fundamentals and the optimization of pre-sale fund supervision are beneficial to all real estate enterprises, among which the optimization of pre-sale fund supervision is better for the real estate enterprises that are not in danger at present, and the turnaround of difficulties can be expected – Jiangsu Zhongnan Construction Group Co.Ltd(000961) , Jinke Property Group Co.Ltd(000656) , Seazen Holdings Co.Ltd(601155) ; Xuhui holding group, Baolong real estate. 4) Again, it is emphasized that core assets are non replicable, highly anti cyclical and have value revaluation space in the economic downturn stage. Continue to recommend: Financial Street Holdings Co.Ltd(000402) . 5) The relaxation and strengthening of policies, the stabilization of the real estate sector and the restoration of property valuation have prompted the entry opportunities of properties: Country Garden Service and Jinke service.
Risk tip: weak demand for repair will lead to the shrinkage of real estate companies and the point spread of the epidemic, resulting in the delay of demand repair.
