Talk every Monday: fundamentals are under pressure and policies are upward
According to the data released by the Bureau of statistics in April this week, all indicators are weak, and the year-on-year growth rate in a single month is lower than that in March; At the time of weakening fundamentals, the policy side showed strong upward action. The five-year LPR interest rate was reduced by 15 BP. There was a loose signal for private enterprise financing, and the “implementation of policies due to the city” continued to work.
Basic orientation: all indicators were weak in April
Commercial housing sales: affected by the epidemic, the sales market further weakened. In April, the sales volume and sales area decreased by 29.5% and 20.9% respectively year-on-year, 6.8 percentage points and 7.2 percentage points lower than the previous month, and – 46.6% and – 39% respectively year-on-year in a single month, 20.4 and 21.3 percentage points lower than the previous month.
Sources of development funds: weak sales led to pressure on industry funds. In April, the sources of development funds decreased by 23.6% year-on-year, 4 percentage points lower than the previous month, 35.5 percentage points lower than the previous month, and 12.5 percentage points lower than the previous month. Among them, the year-on-year growth rates of Chinese loans, self raised funds, deposits and advance receipts, and personal mortgage loans were – 28%, – 6.6%, – 53% and – 42.4% respectively, The demand side capital source accelerated the decline following the weak sales performance, and the supply side capital source remained relatively stable.
Construction indicators: under the condition of poor sales, the newly started area fell sharply, dragging down the construction area at the same time. The completion growth rate was relatively stable, showing toughness. In April, the newly started area decreased by 26.3%, the completed area decreased by 11.9% and the construction area increased by 0.01% year-on-year, 8.8, 0.4 and 0.98 percentage points lower than that of the previous month respectively. Under the monthly caliber, the newly started area decreased by 44.2%, the completed area decreased by 14.2% and the construction decreased by 17.2%, Due to the weakness of sales and payment collection and the shortage of funds in the industry, the willingness and ability of real estate enterprises to start new construction have declined, which has driven the growth rate of construction area down.
Investment in real estate development: land purchase fee and construction and installation investment were dragged down, and the cumulative year-on-year growth rate of development investment decreased significantly. In April, the cumulative year-on-year growth rate was – 2.7%, down 3.4 percentage points from the previous month, the single month year-on-year growth rate was – 10.1%, down 7.7 percentage points from the previous month. Among them, the single month year-on-year growth rate of land purchase fee was 11.5%, and the cumulative year-on-year growth rate of other investments was – 2.2%. The land purchase fee was affected by the weakness of the land market, The growth rate continued to be negative; The construction and installation investment was also dragged down by the decline of new construction; Policy orientation: LPR interest rate down, private enterprise financing is now warming signal
Loose monetary policy: on May 20, the five-year LPR was reduced by 15 BP. Combined with the reduction of 20 BP in the lower limit of the first loan interest rate on May 15, the mortgage interest rate in some cities can be reduced by 35 BP at one time, as low as 4.25%. This measure will effectively reduce the repayment pressure of home buyers, so as to release more reasonable demand for house purchase and support the commercial housing market out of the trough;
Financing of private enterprises warmed up: from May 16 to 17, Longhu, Midea and country garden announced that they would issue bonds, with a total financing amount of 2 billion. As the leader of private real estate enterprises, after the three private enterprises test the water in the bond market, it will help the market restore confidence in private enterprise bonds and promote the broadening of bond financing channels of private enterprises;
The policy of “implementing policies for the city” continues to be relaxed: the number of identified family houses in Chengdu is relaxed, and the number of houses purchased in suburban areas (counties) is not included in the number of houses in the central urban area Jiangsu Lianyungang Port Co.Ltd(601008) provide subsidies at the rate of 1-2% of the purchase price for family purchase; Hangzhou is relaxed for three child families and can buy one more house in the number of purchase restrictions; Yinchuan implemented a series of easing actions, such as relaxing the purchase restrictions, reducing the down payment ratio of the first and second sets, and implementing “recognizing houses but not loans”.
Data tracking (may 9-may 15):
New housing market: the transaction area of 30 cities is – 49pct and – 40pct in one week and cumulative year-on-year respectively, first tier cities – 41pct, – 38pct, second tier cities – 73pct, – 69pct, third tier cities – 12pct and + 4pct.
Second hand housing market: the transaction area of second-hand housing in 13 cities was – 19pct year-on-year in a single week and – 29pct year-on-year in total.
Land market: the cumulative construction area of land supply in 100 cities is + 4pct year-on-year, the cumulative construction area of transaction is – 8pct year-on-year, the cumulative transaction amount is – 51pct year-on-year, and the land transaction premium rate is 3.03%.
City market month on month: Beijing (+ 25pct), Shanghai (+ 33pct), Guangzhou (+ 35PCT), Shenzhen (+ 118pct), Nanjing (+ 11pct), Wuhan (+ 41pct), Chengdu (+ 74pct)
Investment strategy: it is recommended to select the leading real estate enterprises Poly Developments And Holdings Group Co.Ltd(600048) , China Vanke Co.Ltd(000002) , Longhu group with stable operation and good credit background; High quality real estate enterprises Hangzhou Binjiang Real Estate Group Co.Ltd(002244) , Greentown China, etc. under the product-oriented logic; Jianfa international and Yuexiu real estate, leaders of local state-owned and central enterprises with good credit background and development potential; Green City Management Holdings, the industry leader recommended in the field of agent construction.
Risk tip: the sales market is down, and some real estate enterprises have a storm of debt default.
