Matters:
At the central level, on January 17, the central bank carried out 700 billion yuan one-year MLF operation and 100 billion yuan seven-day reverse repurchase operation, and the bid winning interest rate was reduced by 10bp; At the press conference on financial statistics on January 18, it was said that the policy force should be appropriately advanced, the monetary policy toolbox should be opened wider, the total amount should be kept stable and the credit collapse should be avoided.
At the local level, recently, the proportion of down payment for the second set of application for provident fund loans in Beihai has been reduced to 40%; Zigong, Sichuan province cancels the restriction that two housing provident fund loans must be separated by 12 months or more, and implements the practice of recognizing loans but not houses; Yantai’s retention ratio of regulatory funds for the pre-sale of commercial housing of trustworthy Housing enterprises decreased by up to 5 percentage points.
Ping An View:
Sales and credit have not improved significantly, and the industry liquidity risk remains. Although the policy has gradually warmed up since September 2021, the average daily turnover of new houses in 50 key cities in the first 19 trading days of January 2022 decreased by 26.8% year-on-year and 21% month on month. The annual sales of top 100 real estate enterprises in 2021 increased negatively for the first time in nearly five years; In December, the new medium and long-term loans for residents were only 355.8 billion yuan, a year-on-year decrease of 83.4 billion yuan. The slowdown in the release of mortgage loans also reflected that the demand was still relatively weak. At the same time, the Chinese loans in the funds paid in by real estate enterprises in December decreased by 31.6% year-on-year, which also reflects that the external financing environment of real estate enterprises has not improved significantly. The first quarter is the debt maturity peak of real estate enterprises, and the current industry liquidity risk has not been completely eliminated.
Stabilizing real estate financing has become the focus of the moment, and policies still need to be continued. Previously, the central economic work made it clear that “efforts should be made to stabilize the macro-economic market”. As an important support for the economy, real estate investment fell sharply by 13.9% year-on-year in December 2021. Under the tightening of financing, short-term real estate investment is still not optimistic. The press conference on financial statistics made it clear to avoid credit collapse. In 2021, the balance of real estate loans accounted for 27% of the balance of various loans of financial institutions. As an important investment direction of credit, it is particularly important to stabilize real estate financing. Looking forward to the follow-up, we believe that it is necessary to accelerate the downward guidance of mortgage interest rate and boost the confidence of home buyers, but the more important thing is the repair of financial institutions’ risk appetite in the industry.
Local policies continue to evolve due to urban implementation policies, and positive factors continue to converge. Recently, Yantai relaxed the regulation of pre-sale supervision funds, and the retention proportion of pre-sale supervision funds of commercial housing for development enterprises with AAA credit rating was reduced 5pct; AA level development enterprises reduce 3PCT, which will help real estate enterprises alleviate the pressure of cash flow, and high-quality real estate enterprises are expected to further expand their capital advantages. Beihai, Zigong and other inland weak level cities have gradually relaxed the “supporting market” such as provident fund loans and down payment ratio. It is expected that there is still room for policy fine-tuning in some areas under supply and demand pressure under the background of urban implementation.
Investment suggestion: at present, it still takes time to repair the investment confidence of real estate enterprises and the confidence of residents in buying houses. Under the general tone of “focusing on stability”, the policy still needs to work from the demand side, financing side and other dimensions to stabilize real estate financing. The short-term industry liquidity crisis has not been eliminated, the policy game space is still in place, the medium and long-term industry bottoms out and stabilizes, and the leading real estate enterprises will benefit more from the warmth of policies and stand out with comprehensive advantages. It is suggested to pay attention to the leading real estate enterprises with strong short-term pressure resistance and prominent medium and long-term competitive advantages, Poly Developments And Holdings Group Co.Ltd(600048) , Gemdale Corporation(600383) , China Merchants Shekou Industrial Zone Holdings Co.Ltd(001979) , China Vanke Co.Ltd(000002) . The valuation of property management and business management sector has reached an all-time low, and they are optimistic about country garden service, poly property, xinchengyue service and Xingsheng business, which are the leaders of property management with outstanding comprehensive strength and continuous good operation. From the perspective of industrial chain, it is suggested to pay attention to waterproof faucet Keshun Waterproof Technologies Co.Ltd(300737) .
Risk tips: 1) if the new land storage scale of real estate enterprises is insufficient, it will have a negative impact on the supply, sales and investment of goods; 2) Large scale impairment risk of real estate enterprises; 3) Policy care is less than expected risk.
