Ping An View:
The supply of residential land in pilot cities decreased slightly year-on-year, and the first batch of rules continued to be optimized: the total residential supply area of 17 cities that have announced plans in 2022 is 140 million square meters, a decrease of 8% compared with the planned supply in 2021; Among them, the first batch of land supply in 14 cities accounted for 12% of the annual plan, down from the first batch in 2021 (27%), which was mainly affected by the increase of supply batches throughout the year. The first batch of centralized land supply in 2022 mainly adopts the method of “limited land price, limited house price and lottery / one-time quotation”. Compared with the third batch of cities with limited house price in 2021, the number of cities has decreased. At the same time, the starting price of the batch of furnace plots in the current round of auction in the previous year has been reduced and the sales price limit of some plots has been increased. On the whole, the bidding requirements and the quality of land supply have been optimized.
The performance of the first batch of land auction was mediocre, and the central state-owned enterprises were still the main force in land acquisition: in 2022, 337 land were sold in the first batch of centralized land auction in 18 cities, with a total turnover of 396.6 billion yuan; The auction rate is 17% and the transaction premium rate is 5%, which is not significantly improved from the third batch in 2021 (13% and 3%). Among them, the differentiation between cities and regions continues, and the core plots of core cities are more favored. From the perspective of land acquisition characteristics of real estate enterprises, affected by factors such as the reduction in the number of partners and the reduction in the stability of cooperation, the number of independent transaction plots in 18 cities increased, accounting for 82% of the total transaction; Thanks to capital advantages, central state-owned enterprises are still the main force in land acquisition; At the same time, the phenomenon of supporting the bottom of local state-owned enterprises still exists. In terms of profitability, it is estimated that the average gross profit margin of hot plots is 21%, which is basically equivalent to the second batch (20%) in 2021 and higher than the first batch (16%) in 2021.
The capital pressure is the main reason for the dull local auction, and the second batch is expected to remain under pressure: Although the policy side continues to improve, the current industry is still facing two major problems: poor financing channels and insufficient sales collection. The cash flow of real estate enterprises is affected, the expectation of sales decentralization is reduced, and the enthusiasm for land acquisition is hindered. In the future, we judge that the short-term land market will still be under pressure, mainly considering the policy time lag, the difficulty of realizing the sales of subsequent batches of supply plots within the year, and the surviving real estate enterprises may pay more attention to the optimization of business model and the improvement of comprehensive strength. Blindly impacting the scale is no longer one of the primary objectives.
Investment suggestion: Despite the optimization of local auction rules and the improvement of land supply quality, the first batch of centralized land supply did not change significantly in 2022 under the effect of capital pressure and pessimistic sales expectations, and the downward pressure on the industry still exists. Subsequently, with the development of policies and the resonance of recovery after the epidemic, we believe that the end of the second quarter and the beginning of the third quarter are an important observation window period for the stabilization of the property market. In the second half of the year, the industry is expected to gradually usher in the honeymoon period of policy easing and sales recovery, and the sector valuation is expected to be gradually repaired. The development sector is mainly concerned about: one is the strong operating and high credit enterprises with relaxed short-term benefit policies and improved gross profit margin at the land acquisition end, which are expected to seize market share in the medium and long term, such as Poly Developments And Holdings Group Co.Ltd(600048) , China Vanke Co.Ltd(000002) , Gemdale Corporation(600383) , China Merchants Shekou Industrial Zone Holdings Co.Ltd(001979) , Hangzhou Binjiang Real Estate Group Co.Ltd(002244) , etc; One is the subject matter of policy game elasticity with certain support for Fundamentals, such as Seazen Holdings Co.Ltd(601155) , Jiangsu Zhongnan Construction Group Co.Ltd(000961) , etc. The valuation of property management sector has reached a record low. With the deregulation of policies and the improvement of real estate enterprise funds, it is expected to bring high-quality property enterprise valuation repair. It is suggested to pay attention to country garden service, poly property, China Merchants Property Operation & Service Co.Ltd(001914) , xinchengyue service, Xingsheng commerce, etc.
Risk tips: 1) the timeliness of policy improvement is lower than the expected risk; 2) The fermentation and chain reaction of individual real estate enterprises’ liquidity problems exceed the expected risks; 3) The short-term fluctuation of the real estate industry exceeds the expected risk.
