In 2021, the national real estate market was high before and low after. In the first and second half of the year, the prosperity of both the sales market and the land market has declined rapidly since June. From the "three red lines", "two concentration", "centralized land supply" to the guaranteed delivery policy after the emergence of liquidity pressure, the uncertainty of real estate regulation policy has had a significant impact on the market. No matter from developers, local policies or buyers, all participants in all links of the real estate market have significantly changed their behavior due to the change of market expectations in the future.
We believe that the business ideas of real estate enterprises will change significantly in the following three aspects:
\u3000\u30001. From land to cash:
The competitive land price is limited, the house price is superimposed, the pre-sale funds are strongly supervised, the land hoarding strategy fails, and the land acquisition by retained cash has become the consensus of enterprises;
\u3000\u30002. From pursuing scale to pursuing stability:
After the three red lines, the sales scale is no longer a reference factor to measure financing. From the top to the bottom, enterprises choose to live long rather than run fast;
\u3000\u30003. From national expansion to regional deep cultivation:
The pre-sale funds are subject to strong supervision, the fund allocation channel of the group is blocked, and the regional deep ploughing strategy replaces the national strategy with low control cost.
For 2022, we believe that before the real estate policy is substantially reversed, the market supply and demand is difficult to repair spontaneously, and the prosperity is under great downward pressure. In terms of sales area, construction area, completed area, construction area and real estate development investment, we believe that the year-on-year growth rate in 2022 is - 5.8%, - 20.5%, + 3.8%, - 1.1% and - 3% respectively. Policy side factors need to be further improved to stabilize growth.
We believe that under the expectation that the real estate sector will usher in the continuous improvement of policies in 2022, the competition pattern of the head real estate enterprises will be optimized, and the stock of the head real estate enterprises will continue to deduce the logic of "the winner is the king". Three main lines are recommended: 1) leading real estate enterprises under the structural differentiation of financing environment: Green City China, Poly Developments And Holdings Group Co.Ltd(600048) , China Vanke Co.Ltd(000002) ; 2) Regional deep ploughing private enterprises: Hangzhou Binjiang Real Estate Group Co.Ltd(002244) ; 3) High rated and stable private enterprise: Xuhui holding group. Focus on leading real estate enterprises Gemdale Corporation(600383) , China Merchants Shekou Industrial Zone Holdings Co.Ltd(001979) , and China's overseas development.
Risk tips: changes in financing policies, land market transfer rules, real estate sales policies, real estate regulation policies, lagging or untimely quoted data, and measurement deviation risk.
