Market review this week. In the 20th week, the real estate sector index was weaker than the CSI 300 index and the gem index. The relative return of the real estate sector compared with the CSI 300 index was – 1.6%. The CSI 300 index closed at 407760, with a weekly increase of 2.2%; The gem index closed at 241735, up 2.5% weekly; The real estate sector index closed at 327507, with a weekly increase of 0.6%.
Industry highlights this week. The 1-year LPR of the new phase is 3.70%, unchanged from the previous phase; LPR over 5 years was 4.45%, down 15 basis points from the previous period. 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. Nanjing Housing Association issued a document that revealed that new policies such as purchase restrictions, talent purchase support and housing provident fund loans for second-hand houses were completely cancelled, but they were stopped in the evening of the 20th. Yantai, Shandong Province canceled the restriction of registered residence on non local loans of housing provident fund.
Zhongshan lowered the proportion of land bidding deposit and changed the payment method of land price.
This week, the sales volume of new houses and second-hand houses in the first tier cities decreased slightly compared with last week, and the sales volume of second tier cities increased compared with last week. In the 20th week, the sales of new houses in 29 major cities was 22000, a decrease of 8.7% compared with the 19th week; The sales of second-hand houses in 11 major cities was 8000 units, a decrease of 8.7% compared with the 19th week; The transactions of new houses and second-hand houses in first tier cities decreased by 26.4% and 25.8% respectively compared with the 19th week; The transactions of new houses and second-hand houses in second tier cities increased by 6.2% and 3.4% respectively compared with the 19th week. The inventory volume decreased compared with last week, the inventory and sales of 15 major cities and first tier cities increased compared with last week, and the inventory and sales of second tier cities decreased compared with last week. As of the 20th week, the inventory in 15 major cities was 1.234 million units, a decrease of 2000 units compared with the 17th week; The stock to sales ratio was 21.8 months, a decrease of 0.1 month compared with the 19th week. The land market transfer heat this week decreased compared with last week. In the 20th week, a total of 2 pieces of land were sold in 26 big cities. The amount of land transfer decreased. In the 19th week, the land transfer fee in 26 major cities was 3.53 billion yuan, a decrease of 21.87 billion yuan compared with the 19th week. The average premium rate decreased. In the 20th week, the average premium rate of land transactions in 26 major cities was 0.0%, down from the 19th week.
Announcement of key companies Greenland Holdings Corporation Limited(600606) the largest shareholder reduced 1.8% of the company’s shares. Chengxin international credit rating committee approved and maintained the credit rating of Jinke Property Group Co.Ltd(000656) subject as AAA, and the company responded to the rumor of bond extension.
This week, the sales of new houses and second-hand houses continued to consolidate at a low level, and the local auction market is still hot. The central bank announced that LPR has decreased by 15bp since five years. In combination with the previous document issued by the central bank allowing the interest rate of the first house to be reduced to lpr-20bp, there is great room for adjustment of mortgage interest rate. At the same time, the policy easing has further spread from the third and fourth tier cities to the new first tier cities. We believe that the demand side policy has officially broken through the previous framework of urban policy implementation, and the loose orientation is very obvious. In this policy context, we believe that with the resumption of work and production, the industry sales inflection point is expected to occur in the next 1-2 months. However, we believe that the market repair is not achieved overnight. Low rated real estate enterprises still lack the ability to increase leverage in the short term, which will drag down the rhythm of their balance sheet repair. We continue to be optimistic about the dominant position of leading real estate enterprises in the market adjustment stage. In addition, regional real estate enterprises are expected to have better flexibility in the structural market. We are optimistic about the first-line leaders with stable performance, and recommend China Vanke Co.Ltd(000002) ( China Vanke Co.Ltd(000002) , buy), Poly Developments And Holdings Group Co.Ltd(600048) ( Poly Developments And Holdings Group Co.Ltd(600048) , buy); Second tier leaders with flexible performance are recommended Gemdale Corporation(600383) ( Gemdale Corporation(600383) , buy) and Longhu group (00960, buy). At the same time, we are optimistic about the property management and business management industry with rapid growth and less credit damage. We recommend Country Garden Service (06098, buy), poly property (06049, buy), China Merchants Property Operation & Service Co.Ltd(001914) ( China Merchants Property Operation & Service Co.Ltd(001914) , overweight), New Dazheng Property Group Co.Ltd(002968) ( New Dazheng Property Group Co.Ltd(002968) , buy), rongchuang service (01516, buy), Xingsheng Commerce (06668, buy).
Risk tips
Sales were significantly lower than expected. The counter cyclical policy was less than expected. Interest rates have risen significantly.
