We are optimistic about the recovery of real estate and related industries under the strong guidance of future policies, because at present, the real estate industry chain is still an important support to ensure that the economy will not stall. We estimate that the decline of real estate investment by 1 percentage point will directly affect the GDP growth by 0.12 percentage points, and affect the GDP growth by 0.01 percentage points through related industries. According to the current real estate sales situation, we judge that the growth rate of real estate investment in 22 years is - 1.6%, which will drag down the economy by 0.208 percentage points, down 0.78 percentage points compared with last year's GDP growth, which will bring real difficulties to ensure the target growth rate of 5.5% for the whole year.
We make the following judgments on the key indicators of the real estate:
Sales: with the accelerated easing of policy margin, the cumulative year-on-year growth rate will reach the bottom at the end of the second quarter and the beginning of the third quarter of this year, and the year-on-year growth rate of sales area is expected to be - 8%;
Land purchase fee: affected by the current land transaction and the settlement of the balance of previous transactions, it is expected that the first and second quarters will be the bottom, which will start to rise after the middle of the year, with a year-on-year growth rate of - 5%;
New construction area: it is increasingly affected by sales. Sales not only determines the land acquisition willingness of real estate enterprises, but also affects the capital adequacy of real estate enterprises, and then affects the land acquisition ability of real estate enterprises. The cumulative year-on-year growth trend of the two is also consistent. It is expected to recover after stabilizing in the third quarter, with a year-on-year growth rate of - 9% in the whole year;
Completed area: affected by the epidemic and the shortage of funds of real estate enterprises, the cumulative year-on-year lag with sales has been extended to more than 48 months. Under the background of "guaranteed completion", the bottom is supported. It is expected that the downward trend in the third quarter will slow down, stabilize and recover in the fourth quarter, and - 2% year-on-year in the whole year;
Real estate investment: affected by the construction area, construction intensity and land purchase cost, the construction area is expected to hit the bottom in the middle of the year, the construction intensity is slightly increased compared with the previous year, and the land purchase cost is the main drag. The annual construction and installation project investment is 0.14% year-on-year, the land purchase cost is - 5%, and the growth rate of real estate investment is - 1.6%. The real estate chain mainly includes upstream construction related categories and downstream driven consumption categories. The former is mainly driven by real estate investment and construction, while the latter mainly depends on the sales and completion of real estate. Based on the changes of meso indicators in the industry, we have observed the relationship between the real estate sector and the real estate chain sector from the fundamental and market aspects. At present, the real estate and the real estate chain show rare differentiation, giving the market a rare layout opportunity:
Fundamentals: the sales, completion, new construction and construction of the medium-term indicators of real estate are expected to reach the bottom in the third and fourth quarters, so as to drive the business of all sectors of the industrial chain to form a substantive improvement;
Market: the index decline of the real estate chain sector deviated from the real estate sector. This round of real estate stocks did not drive the synchronous strengthening of related sectors. The early loose real estate policy has not changed the expectations of related industrial chains, but this differentiation also provides opportunities for the layout of the real estate industrial chain.
Investment strategy: the fundamentals and policy expectations of the industry are a seesaw.
Before the fundamentals recover, the policy will continue to increase, and the valuation level of high-quality companies in the industry is expected to improve; It is suggested to select Poly Developments And Holdings Group Co.Ltd(600048) , China Vanke Co.Ltd(000002) , Longhu group, the leading real estate enterprises with stable operation; 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.
After the fundamentals are improved, the uncertainty expected of industrial chain companies will be eliminated, relevant companies will obtain excess returns, the sales indicators will recover first, and then drive the completion and new construction to warm up one after another; Therefore, according to the order of benefits, it is recommended to give priority to the post cycle sectors of real estate that benefit from the recovery of sales, namely household products and household appliances; Followed by decoration, building materials and construction machinery.
Risk tip: the continuous downturn of the commercial housing market, the risk of repeated epidemics and the risk of industrial capital chain lead to the risk of fluctuation of real estate investment.
