In April, the operating sales amount of top 100 real estate enterprises decreased by 58.4% year-on-year. According to the ranking data of sales performance in April 2022 released by Kerui, the top 100 real estate enterprises achieved a monthly sales amount of 430.65 billion yuan, a year-on-year decrease of 58.4%, an increase of 5.7 percentage points over March; Decreased by 15.8% month on month. The sales amount of equity in a single month was 347.91 billion yuan, a year-on-year decrease of 58.9%, an increase of 4.4 percentage points over March; Decreased by 12.6% month on month.
The cumulative sales amount of each echelon from January to April decreased significantly year-on-year and the threshold, and the waist real estate enterprises decreased the most. In terms of sales scale, from January to April 2022, the top 10 real estate enterprises realized a sales amount of 823.16 billion yuan, a year-on-year decrease of 45.6%; Top11-20 real estate enterprises realized a sales amount of 302.96 billion yuan, a year-on-year decrease of 54.5%. In terms of threshold, the threshold of the top 10 decreased from 85.7 billion yuan to 43.71 billion yuan, a year-on-year decrease of 49.0%, which is the smallest decline among all echelons; The threshold of the top 20 decreased from 54.34 billion yuan to 22.54 billion yuan, a year-on-year decrease of 58.5%.
In terms of leading companies, the sales of single month in April remained declining year-on-year and month on month, and only three of the top 40 had positive year-on-year growth. From the perspective of single month sales volume in April, Vanke Real estate had a maximum of 33.1 billion yuan, followed by country garden, Poly Developments And Holdings Group Co.Ltd(600048) , CNOOC real estate and Greentown China, with sales volume of 28.97 billion yuan, 28.7 billion yuan, 22.79 billion yuan and 15.6 billion yuan respectively. From the perspective of the growth rate of sales amount in a single month, only three of the top 40 real estate enterprises achieved positive year-on-year growth. Among them, Yuexiu real estate had the best year-on-year performance, with a year-on-year increase of 69.1% in a single month, followed by Hangzhou Binjiang Real Estate Group Co.Ltd(002244) 38.5%, COFCO Grandjoy Holdings Group Co.Ltd(000031) 19.3%, Lujin group – 23.4% and COSCO Group – 26.3%. China Evergrande, Renheng land and Yango Group Co.Ltd(000671) performed worst.
There are two main reasons for the continuous decline in sales year-on-year: (1) affected by the continuous epidemic, the sales in the Yangtze River Delta with Shanghai as the core are close to stagnation, and the markets such as Beijing and Shenzhen are also dragged down by the epidemic; Under the long-term impact of the epidemic, residents’ expectations of future income growth have declined, and the demand for house purchase has always been suppressed. (2) In the context of the recent “implementation of policies for cities”, many cities across the country have relaxed the housing demand side policies. In April, more than 60 cities issued nearly 90 property market easing policies. The intensity of relaxation has increased significantly, and the direction of relaxation has gradually concentrated on high-energy cities. However, according to the research on the large-scale relaxation cycle in history, we found that the recovery of sales fundamentals will lag behind the overall relaxation of policies by about 5-7 months. Considering that the current demand side easing is mainly concentrated in the second and third tier cities and some first tier suburbs, it is still in the policy climbing period of increasing policy strength and expanding scope, and it will take time for the policy to take effect.
On the whole, on the one hand, with the continuous follow-up of demand side policies, we expect the sales in core cities to stabilize first in the third quarter. On the one hand, we expect to further relax the supply side and stabilize the market demand side after the supply side of the current supply cycle.
Investment suggestion: the year-on-year decline in sales is still expanding, and the fundamentals are still at the bottom, but the direction of policy easing is clear, so as to maintain the “overweight” rating of the real estate development sector. We expect that more policies are in the way, and the main direction is to improve the capital and demand side of enterprises. We believe that “the policy continues to be favorable – the industry fundamentals are bottomed out and are expected to recover later – the state-owned enterprises and high-quality private enterprises resume land acquisition and the gross profit margin of land acquisition will be repaired” is the main logic of 2022, which will reach the three-level resonance upward of fundamentals, industries and enterprises in the later stage. Real estate enterprises with good credit qualification, sufficient liquidity, sufficient soil reserves and high quality are the main choice. It is suggested to pay attention to: A shares Poly Developments And Holdings Group Co.Ltd(600048) , Hangzhou Binjiang Real Estate Group Co.Ltd(002244) , China Merchants Shekou Industrial Zone Holdings Co.Ltd(001979) , Gemdale Corporation(600383) , China Vanke Co.Ltd(000002) , Huafa Industrial Co.Ltd.Zhuhai(600325) ; H shares green city China, China Resources Land, China overseas development, Longhu group, China Jinmao, Xuhui holding group, China Overseas Hongyang.
Risk tip: the impact of the epidemic exceeded expectations, sales exceeded expectations, and policy relaxation was less than expected.
