After a long “cold winter”, the real estate sector seems to be feeling the breath of spring, and a number of favorable policies and expectations are supporting the real estate industry.
First, the loosening of the housing loan policy. Since the central bank lowered the lower limit of the first housing loan interest rate, all localities responded quickly because the city implemented policies to reduce the first housing loan interest rate to the lower limit; Second, the financing of private real estate enterprises is showing signs of recovery. Among them, three private enterprises such as country garden plan to issue corporate bonds totaling 2 billion. A more landmark case is that private enterprises such as Longhu and country garden enable credit protection tool financing, support private real estate enterprises with innovative tools to achieve new phased results in debt financing, and the “demonstration list” of real estate enterprises issuing bonds is also expanding.
It is worth noting that, following Longhu, country garden and Midea real estate, Xuhui group plans to issue financing products next week, involving corporate bonds and supply chain ABS, covering CDs and crmw credit protection tools. Finally, the issuance order will be determined according to the approval process. Relevant informed sources said, “the first batch of private real estate enterprises to start credit protection tool financing has 4-5. Relevant parties made point-to-point communication with these enterprises on the same day, hoping to boost market confidence.”
Under the policy warm wind, today’s real estate stocks performed particularly well and became the focus of the main funds. As of the closing, the real estate sector rose 2.04%, significantly outperforming the market, Langold Real Estate Co.Ltd(002305) , Shenzhen Centralcon Investment Holding Co.Ltd(000042) , Tianjin Songjiang, 5I5J Holding Group Co.Ltd(000560) and other stocks rose strongly. Some analysts compared the current real estate stocks to Baijiu many years ago, and even asserted that the real estate industry would produce “Lu Wumao” after the tide washed away the sand.
How to view the future policy space? From the perspective of analysts from several securities companies, under the background of “stable growth”, the real estate industry, as a pillar industry of the national economy, is expected to receive more support. How to grasp the investment opportunities in the future and take the lead in the layout of “Lu Wumao” in the real estate industry? Some analysts reiterated that they are bullish on the real estate sector, and high-quality leaders and real estate blue chips are more favored.
another private real estate enterprise will use credit protection tools to welcome a turnaround in financing difficulties
Since the central bank lowered the lower limit of the first mortgage interest rate on May 15, more and more regions have reduced the first mortgage interest rate to the lowest limit of 4.4%, and the pace of policy implementation is still accelerating. After Zhengzhou, Tianjin, Jinan and Suzhou, many banks in Wuxi also reduced the first mortgage interest rate to 4.4% from May 19 in addition, according to China International Capital Corporation Limited(601995) statistics, since May, about 30 cities have improved the regulation and control policies of the real estate market in the form of public documents, and the energy level and policy strength of the cities involved are higher than before
The recent warm wind in the real estate market seems to have warmed up the financing of real estate enterprises. After the issuance of ABS in the supply chain of Longhu group, private real estate enterprises have launched credit protection tools. In addition, three private real estate enterprises such as country garden, Longhu and Midea real estate are also issuing corporate bonds at the same time.
On May 19, it was reported that after Longhu group, country garden and Midea real estate, Xuhui group plans to issue financing products next week, involving corporate bonds and supply chain ABS, covering CDs and crmw credit protection tools. Finally, the issuance order will be determined according to the approval process. In response to the above news, Xuhui group responded, “the company is indeed the first batch of demonstration private enterprises to receive regulatory guidance. The financing issuance is currently in the preparatory process, and the information will be disclosed in the form of announcement after the necessary procedures are completed.” Relevant informed sources said, “the first batch of private real estate enterprises to start credit protection tool financing has 4-5. Relevant parties made point-to-point communication with these enterprises on the same day, hoping to boost market confidence.”
It is reported that the first credit protection voucher business of private real estate enterprises in the market was officially launched in Shenzhen Stock Exchange on May 16. The credit protection voucher was jointly created by CSI finance with its own funds and Citic Securities Company Limited(600030) and will support the issuance of ABS in the supply chain with Longhu group, a private housing enterprise, as the core enterprise and serve the financing of upstream suppliers.
The total issuance scale of Longhu supply chain ABS is 402 million yuan, the interest rate of priority asset-backed securities is 3.50%, and the subscription multiple of investors is 2.36 times. The Shenzhen Stock Exchange said that the successful establishment of the credit protection voucher is the first credit protection tool for private real estate enterprises in the market, which is conducive to thickening the credit level of debt financing of private real estate enterprises, marking a new phased achievement of innovative tools to support debt financing of private real estate enterprises.
In addition, country garden also plans to successively arrange the issuance of supply chain ABS and ABN products in June this year. Among them, the supply chain ABS products will use credit protection tools. At present, the issuance is under preparation.
At the same time, private real estate enterprises are also intensively issuing bonds. On May 16, Longhu group announced the issuance of the second phase of domestic corporate bonds in 2022, with an issuance scale of 500 million and a term of 6 years. On the same day, Midea also announced the issuance of 1 billion corporate bonds with a term of 4 years. In addition, country garden also said that it plans to book and issue a corporate bond of no more than 500 million yuan on the Shenzhen Stock Exchange on May 22.
it is worth noting that since September last year, the market has obviously avoided the real estate bonds of private enterprises. As of May 15, private real estate enterprises have not issued public market bonds for 65 consecutive days. In the view of people in the industry, this round of financing of private real estate enterprises has strong ice breaking significance
Huatai Securities Co.Ltd(601688) said that the current round of regulators supported the bond financing of real estate private enterprises. First, implement the policy requirements of “improving the bond financing support mechanism of private enterprises” in the early stage; Second, in April, the bond financing of real estate enterprises is still dominated by central state-owned enterprises, and the net financing of private enterprises continues to be negative. Therefore, it is urgent to stabilize real estate and stabilize expectations, and the subsequent easing policies need to be continued.
future real estate policies still need to be strengthened
What market signal does the signs of the current round of financing recovery of private real estate enterprises release? From the perspective of analysts from several securities companies, we can maintain a more positive attitude towards the policy support of the real estate industry in the future.
China Securities Co.Ltd(601066) real estate team believes that the status of real estate as a pillar industry of the national economy has not changed. Under this background, its role as an economic stabilizer and ballast will become more prominent and is expected to receive more support. Moreover, as the trend of real estate policy remains unchanged, the superimposed epidemic situation is gradually controlled and the production and operation are gradually restored, the effect of the policy is expected to accelerate the implementation.
For the later policy trend, Huatai Securities Co.Ltd(601688) believes that the current real estate sales are still unstable and the liquidity difficulties of real estate enterprises have not been solved. We can expect more high-level and systematic real estate support policies to be issued and implemented. On the financing side, we have recently focused on the possibility of LPR reduction in May. On the demand side, focus on the strength of policy support for rigid demand and improved demand. At present, under the guidance of policies, the demand for improved housing such as new citizens’ just need to buy houses and residents’ filial piety and care for the elderly is expected to continue to be released.
Galaxy Securities real estate team stressed that the follow-up policy support is likely to increase but not decrease. At present, the statements from both the central and local levels are more positive than in the early stage. It is expected that may, June and July will enter the period of intensive adjustment of local policies, and the policy strength and space of “steady growth” are worth looking forward to.
China International Capital Corporation Limited(601995) research report analysis points out that there is still room for further development of the policy on both sides of supply and demand, and the demand side focuses more on the housing and construction policies supporting reasonable housing demand, such as the purchase restriction, and the purchase qualification of the target population with reasonable housing demand is moderately relaxed; In terms of loan restriction, reduce the threshold of house purchase funds or expenditure costs. On the supply side, it may be more necessary to focus on the relief and mitigation of the credit problems of real estate enterprises, such as the further optimization of the regulatory policy of pre-sale funds, the policy countermeasures for reserving and implementing the credit problems of real estate enterprises, strengthening the policy support for the financing of real estate enterprises and the policy measures to improve the cash flow of enterprises.
The view of Anxin securities is relatively cautious. Its research report points out that looking back, the real estate risk is generally controllable, and the reasonable capital demand is being met, although there may be room for further relaxation of the real estate policy, However, “insisting on housing without speculation, insisting on not using real estate as a short-term means to stimulate the economy, and insisting on stabilizing land price, house price and expectation” and “maintaining the continuity, consistency and stability of real estate financial policies, and implementing the prudent management system of real estate finance” are still the current unshakable policy directions. They have built the boundary of real estate relaxation, and “flood flooding to save real estate enterprises” will not be seen.
analysts reiterated that they are bullish on real estate and blue chip real estate is favored
How to grasp the investment opportunities of real estate stocks Citic Securities Company Limited(600030) point of view points out that from the period of opportunity to the climax of the policy, the real estate blue chip is still a good investment window. Although the indicators of real estate enterprises will appear very weak in the first half of the year, it is not the fundamentals but the policy that determine the trend of real estate stocks. The Politburo meeting made a more positive statement. It is expected that due to the implementation of urban policies, the support for self occupied demand will be further improved. Compared with the past six months, the real estate policies will be issued more frequently and vigorously in the next six months, and the loose attitude towards the demand level is more firm. Therefore, we are firmly optimistic about the investment opportunities of real estate blue chip.
In this regard, China Securities Co.Ltd(601066) real estate team also reiterated the view of being bullish on the real estate sector and continued to recommend high credit real estate enterprises. In the future, the industry differentiation will continue, and high credit real estate enterprises will enjoy a new round of industry concentration improvement and profit margin improvement, which is expected to continue to win; And with the local government and the CSRC increasing their support for REITs, they are strongly optimistic about the holding of operating developers in the near future.
Huatai Securities Co.Ltd(601688) believes that under the intensive support of policies, the market’s confidence in real estate is expected to accelerate the recovery, promote the improvement of sales collection and financing of real estate enterprises, the inflection point of real estate sales is expected to arrive in advance, and pay attention to the investment opportunities on the right side of real estate bonds. Strategically, high-quality central state-owned enterprises have allocation value. For the leaders of real estate private enterprises, on the premise of stable debt end, grasp the enterprise fundamentals and debt repayment willingness, and tap high-yield investment opportunities.
China International Capital Corporation Limited(601995) suggests that the short-term dominant logic is still based on policy game, and the general direction has been clarified. The key lies in the grasp of the investment rhythm. If there is a trend of the above policy adjustment in the future, we can consider giving due consideration to “flexible” private enterprises. After this round of short-term game policy logic, in the medium and long term, we will continue to be optimistic about the “good students” who develop the track and the “generalists” who deeply cultivate the real estate track, and the high-quality leaders are expected to continue to win.
