Industry core view:
Under the macro background of "steady growth", the fundamentals of the real estate industry continue to stay at the bottom, and the marginal improvement policy continues. It is expected that there are still many favorable policies to be expected in the follow-up, and continue to be optimistic about the market performance of the real estate sector. It is suggested to pay attention to (1) property management companies with good fundamental performance;
(2) high-quality real estate enterprises with financial stability with the background of central enterprises / state-owned enterprises; (3) Real estate enterprises with high-quality holding properties or transformation enterprises, or effectively form a virtuous capital cycle of "development +".
Key investment points:
Last week's market review: last week, the real estate index of shenwanyi industry rose 0.57%, the Shanghai and Shenzhen 300 index rose 2.23%, and the performance of the real estate sector was slightly weaker than the market. Since 2022, the real estate industry has fallen by 2.86%, and the CSI 300 index has fallen by 17.46%, with significant relative gains.
Key policy highlights: (1) the people's Bank of China authorized the national interbank lending center to announce that the one-year LPR remained unchanged at 3.7%, and the five-year LPR was reduced to 4.45%, up from 4.6%; (2) The Ministry of Finance released the financial revenue and expenditure in April 2022. From January to April, the income from land transfer decreased by 29.8% year-on-year, and the real estate tax was 126.8 billion yuan;
(3) according to the Securities Daily, with the latest reduction of LPR over 5 years, banks in Tianjin, Nantong, Suzhou, Qingdao, Jinan, Chongqing and other places have reduced the first mortgage interest rate to 4.25%; (4) Shanghai plans to reduce the proportion of regulatory funds for local auction from 110% of the starting price to 90% from the second centralized local auction; (5) Relax purchase restrictions in Hangzhou, Haikou, Chengdu, Dalian, Yantai, Tianjin Binhai, Huzhou and other places; (6) Hainan, Nantong, Mianyang, Hengyang, Anyang, Taizhou, Suzhou, Zhangzhou, Yinchuan, Lu'an and other places adjusted some provident fund loan policies, including reducing the down payment ratio and increasing the loan amount; (7) The purchase restriction and relaxation policy in Wuhan and Nanjing is now a one-day tour.
Industry fundamentals: affected by the base, the decline in sales has narrowed, and the performance of the land market is still weak. From May 9 to May 15, the sales of commercial houses in 30 large and medium-sized cities fell 51.54% year-on-year, including 53.23% in the first line, 50.3% in the second line and 52.54% in the third line; The supply and construction of residential land in Baicheng fell by 67.7% year-on-year and 57.14% year-on-year since the beginning of the year; The transaction and construction area of residential land in Baicheng decreased by 65.2% year-on-year and 59.18% year-on-year since the beginning of the year; The premium rate of residential land in Baicheng was 2.9%, up 1.9 percentage points month on month.
Dynamics of key companies: Country Garden, Longhu and Midea real estate have been selected as model real estate enterprises by regulators and will issue RMB bonds successively. In order to attract investors, the founding institutions will simultaneously issue credit protection tools including credit default swaps (private CDs) or credit risk mitigation certificates (crmw), so as to help private real estate developers gradually restore the financing function of the open market; According to market news, Chongqing municipal government has formulated relevant rescue measures for Jinke group. At present, 300 million state-owned assets have been put in place in the negotiation; Midea real estate plans to issue 4.887 million new shares as equity incentive.
Risk factors: the policy strength is less than expected, the industry fundamentals continue to decline rapidly, and the credit risk is higher than expected.
