Main points
Market Review
Last week (may 16-may 20, 2022), the Shanghai Composite Index rose 2.02%, the Shanghai and Shenzhen 300 index rose 2.23%, and the real estate sector rose 0.57%. The real estate sector lost 1.45 percentage points to the Shanghai Composite Index and 1.66 percentage points to the Shanghai and Shenzhen 300 index. A-share real estate companies focused on Xiamen C&D Inc(600153) ( Xiamen C&D Inc(600153) . SH), Seazen Holdings Co.Ltd(601155) ( Seazen Holdings Co.Ltd(601155) . SH), Poly Developments And Holdings Group Co.Ltd(600048) ( Poly Developments And Holdings Group Co.Ltd(600048) . SH) increased significantly, up 8.01%, 2.95% and 2.71% respectively. The H-share real estate company zhongxuhui holding group (0884. HK), which is the focus of attention, led the increase, with an increase of 14.15%.
Industry dynamics
30 city commercial housing sales market improved slightly. From May 9 to May 13, the transaction volume of commercial housing in 30 large and medium-sized cities was 2.5508 million square meters, with a cumulative year-on-year decrease of 42.19%, and the decline was slightly narrowed. Among them, 397500 square meters of commercial housing were sold in first tier cities, with a cumulative year-on-year decrease of 41.67%, 1224600 square meters in second tier cities, with a cumulative year-on-year decrease of 37.66%, and 628700 square meters in third tier cities, with a cumulative year-on-year decrease of 49.95%. The planned construction area of land traded in 100 large and medium-sized cities was 5.2927 million square meters, with a cumulative year-on-year decrease of 62.66%. Among them, there was no transaction in the first tier cities, with a cumulative year-on-year decline of 66.46%; The planned construction area of land traded in second tier cities was 2.7124 million square meters, with a cumulative year-on-year decrease of 59.46%.
Industry news
The central bank lowered the LPR over 5 years. On May 20, 2022, the quoted interest rate (LPR) of the loan market is: 1-year LPR is 3.7%, and more than 5-year LPR is 4.45%. LPR over 5 years decreased by 15bp compared with April (4.6%).
Investment advice
With the gradual relaxation of local sales and local auction policies, the state-owned central enterprises with low leverage in the early stage will take the lead in benefiting, and the industry pattern is facing reconstruction. It is suggested to pay attention to the relevant targets: (1) real estate enterprises with low financing cost and sustainable land acquisition in the first and second tier cities, such as Poly Developments And Holdings Group Co.Ltd(600048) ( Poly Developments And Holdings Group Co.Ltd(600048) . SH), Greentown China (3900. HK), Longhu group (0960. HK), Hangzhou Binjiang Real Estate Group Co.Ltd(002244) ( Hangzhou Binjiang Real Estate Group Co.Ltd(002244) . SZ), Huafa Industrial Co.Ltd.Zhuhai(600325) ( Huafa Industrial Co.Ltd.Zhuhai(600325) . SH) Cinda Real Estate Co.Ltd(600657) ( Cinda Real Estate Co.Ltd(600657) . SH), etc; (2) Under the increasing market pressure, the market demand for agent construction is gradually opening up, and the relevant targets are: Greentown Management Holdings (9979. HK) and Zhongyuan construction industry (9982. HK).
Risk tips
Tightening of real estate regulation policies; Real estate sales fell short of expectations.
