The margin of sales expectation deteriorated and the interest rate cut boosted market confidence
In 2021, the sales area of commercial housing in China was + 1.9% year-on-year, and the sales amount was + 4.8% year-on-year. The monthly sales amount in December was + 39.9% month on month and – 17.8% year-on-year. The year-on-year decline was 1.5pct larger than that in November. Since the second half of the year, the pressure of high base has gradually appeared. In December, the average monthly sales price was 9512 yuan / square meter, with a month on month ratio of – 0.9% and a year-on-year ratio of – 2.5%, which was the lowest in the year. At the end of the year, real estate enterprises increased marketing efforts and continued to exchange price for quantity to accelerate inventory removal. Since the fourth quarter, local policies have been gradually upgraded due to urban construction, and support policies such as house purchase subsidies, provident fund and talent house purchase have been superimposed with loose mortgage. Support the stabilization of short-term sales expectations, but the sustainability of sales improvement under the pressure of high base needs to be tested. On January 17, the interest rate of one-year MLF was reduced by 10bp. Although the mortgage interest rate in the fourth quarter has achieved the effect of targeted interest rate reduction by adjusting local points, we believe that the potential adjustment of the subsequent five-year LPR will have a greater impact on the market expectation level and is expected to inject more confidence into the real estate demand side. We maintain the judgment that the national commercial housing sales amount in 2022 is – 6.1% year-on-year.
The development investment has dropped for four months, and the stock construction is still resilient
In 2021, the completed investment in national real estate development increased by + 4.4% year-on-year, by – 13.9% year-on-year and – 16.9% month on month in December, with negative year-on-year growth for four consecutive months. Including: 1) land investment: the annual land transaction price was + 2.8% year-on-year, and that in December was + 4.1% month on month, with a year-on-year increase of – 4.2%. The third round of centralized land supply continued to be depressed. We believe that the recovery of reinvestment expectation will depend on the improvement of sales end; 2) Construction investment: the new construction area in the whole year was – 11.4% year-on-year, and that in December was – 0.1% month on month, with a year-on-year increase of – 31.2%; Year on year construction area + 5.2%; The completed area in the whole year was + 11.2% year-on-year and + 1.9% year-on-year in December. We believe that the supervision of pre-sale funds is expected to support the resilience of stock construction and superimpose the potential hedging of indemnificatory rental housing. It is expected that the completion of real estate development investment in 2022 will be – 2.6% year-on-year.
The growth rate of funds in place fell synchronously, and the industry credit met the test in the first quarter
In 2021, the funds in place of national real estate development enterprises were + 4.2% year-on-year, 0.2pct lower than the development investment, and – 19.3% year-on-year and + 6.0% month on month in December. Among them: 1. Sales collection: the annual deposit and advance collection are + 11.2% year-on-year, the December single month is – 25.9% year-on-year and + 32.7% month on month. The growth performance is weaker than the sales amount of commercial housing in the same period, or it indicates that the front-end demand margin has dropped; In the whole year, personal mortgage loans increased by + 8.0% year-on-year, by – 7.9% year-on-month in December, and by – 6.8% month on month. After a lapse of three months, there was a negative growth in both the same period and month on month, or it showed that the improvement in sales from October to November was mainly the centralized replenishment of the previous backlog demand. 2. External financing: China’s loans in the whole year were – 12.7% year-on-year, 31.6% year-on-year in December and + 11.0% month on month; Self raised funds in the whole year were + 3.2% year-on-year, -9.8% in December and – 10.5% month on month. Under the current risk appetite, the easing of real estate refinancing is only limited to high-quality head real estate enterprises and local state-owned enterprises. In the first quarter of 2022, the industry is facing the pressure of project payment and centralized maturity of domestic and overseas bonds, and the credit level is also facing a major test.
There is still room for policy game
1) there are more possibilities for alpha generated by credit problems. It is worth looking forward to the follow-up refinancing support (not excluding equity refinancing), debt ratio assessment and the improvement of the participation of local state-owned assets; 2) The excessive superposition effect after the expected reversal needs to be alleviated. It is also possible to improve liquidity runs and avoid excessive upgrading at the local level through top-down coordination; 3) The policy beta depends on the passive trigger of macro and fundamentals. In particular, the industry fundamentals and credit level will face major challenges in the first quarter. We are still optimistic about the three stability expectations and the continuous upgrading of urban implementation policies, and even the introduction of higher supporting policies in extreme cases.
Grasp the improvement of M & A on the left and concentration on the right
The future industry beta depends on the adjustment of industry structure, the pace of capacity clearing and the strength of policy support; Alpha focuses on the repair of the balance sheet and profit margin of key real estate enterprises by M & A, the accuracy of countercyclical plus leverage, and the long-term excavation of the value of housing scenarios. Suggestions: 1) high quality leaders: Gemdale Corporation(600383) , Poly Developments And Holdings Group Co.Ltd(600048) , Vanke A, Longhu group, China Merchants Shekou Industrial Zone Holdings Co.Ltd(001979) ; 2) High quality growth: Jinke Property Group Co.Ltd(000656) , Seazen Holdings Co.Ltd(601155) , Xuhui holding group; 3) High quality property management: Country Garden service, xinchengyue service, Greentown service, China Merchants Property Operation & Service Co.Ltd(001914) , poly property, Xuhui Yongsheng.
Risk warning: industry credit risk spread; The downward cycle of industry sales begins; Administrative regulation and control remained high-pressure, and the pilot strength of real estate tax exceeded expectations; Subjective measurement deviation risk
