Affordable rental housing is expected to become one of the important directions for stable investment this year. China’s affordable housing system has been continuously improved. Since 1994, it has experienced various forms of development, such as low rent housing, affordable housing, shed reform and old community transformation, especially the shed reform in 14-18 years, which has effectively stimulated the demand of the real estate market through monetary resettlement. At the end of last year, the central economic work conference pointed out that “we should adhere to the simultaneous development of rent and purchase, accelerate the development of long-term rental housing market and promote the construction of indemnificatory housing”. All localities have also successively issued relevant plans for the 14th five year plan. On January 20 this year, the working conference of the Ministry of housing and urban rural development pointed out that “we should adhere to the simultaneous development of rent and purchase, and raise 2.4 million indemnificatory rental housing units this year”. The raising target increased by 156% compared with last year, and the development of affordable rental housing is expected to enter the acceleration period. We believe that ensuring housing construction can stabilize investment in the real estate industry in the short term, which is expected to become one of the important directions of steady growth this year. In the long term, it is also an important focus to achieve the two goals of “housing without speculation” and “common prosperity”. The industry is expected to show excellent growth in the medium and long term.
It is estimated that about 7.4 million sets of affordable rental housing will be raised throughout the country in the 14th five year plan, and the construction and installation investment will be about 240 billion yuan in 2022. According to our calculation, about 7.4 million affordable rental housing units are expected to be raised nationwide in the 14th five year plan. Considering that the construction of affordable housing is expected to accelerate significantly in 2022, we assume that 1.94 million affordable housing units will be newly built this year, with an average of 70 square meters per unit, and the construction and installation investment including decoration per square meter is 3000 yuan. Since the construction period of the housing construction project is 1-2 years, we assume that the newly started indemnificatory rental housing will complete 30% of the construction and installation investment in the current year, 60% in the second year and 10% in the third year. Based on the above assumptions, it is estimated that the cumulative total construction and installation investment of affordable housing in the 14th five year plan is expected to reach 1.4 trillion yuan, and the construction and installation investment is expected to reach about 240 billion yuan in 2022, accounting for about 2% of the real estate construction and installation investment. Affordable housing is expected to play a leading role in policy and accelerate the industrialization, greening and information transformation of the industry. Affordable housing is a government led investment project and an important policy carrier leading the transformation and upgrading of the construction industry at the industrial level. It is expected that the government will put forward higher requirements for the assembly rate, green construction and intelligent construction standards of affordable housing, forming an industry demonstration benchmark. We believe that affordable housing is expected to play a strong policy leading role in promoting the industrialization, informatization and green transformation of the whole construction industry chain: in the construction link, technologies such as prefabricated buildings and aluminum formwork are implemented to improve the industrialization and informatization level, green building materials are selected for building materials, low-energy buildings are used for building types, and more attention is paid to power conservation and energy conservation in the operation and maintenance link.
The construction of affordable housing will inject new impetus into the prefabricated development. Prefabricated technology is widely used in affordable housing. The acceleration of affordable housing construction this year will effectively drive the development of prefabricated construction industry. According to our estimation, in 2022, the new construction area of prefabricated affordable housing will be 95 million square meters, accounting for 14% of the total new construction area and contributing 41% of the annual incremental market. In terms of market segments, the market scale of prefabricated PC, steel structure and prefabricated decoration brought by affordable housing in 2022 (calculated by area) is 24%, 14% and 61% of the market scale in 2020 respectively. Affordable housing may have the greatest pulling effect on the prefabricated decoration market, and will also drive the penetration of steel structure in housing.
Investment suggestions: 1) affordable housing construction is expected to become one of the important directions of steady growth. It is mainly recommended that China State Construction Engineering Corporation Limited(601668) (the leader of affordable housing construction in China), Shanghai Construction Group Co.Ltd(600170) (the leader of affordable housing construction in Shanghai), Shenzhen Capol International&Associatesco.Ltd(002949) (the leader of affordable housing design), China State Construction Engineering Corporation Limited(601668) International (MIC has advanced assembly technology and rich experience in residential projects). 2) Affordable housing is expected to accelerate the industrialization, informatization and green transformation of the construction industry, focusing on the steel structure leaders Changjiang & Jinggong Steel Building(Group)Co.Ltd(600496) , Anhui Honglu Steel Construction(Group) Co.Ltd(002541) ; Aluminum formwork faucet Jiangxi Geto New Materials Corporation Limited(300986) and Zhejiang Huatie Emergency Equipment Science & Technology Co.Ltd(603300) ; Assembled decoration faucet Zhejiang Yasha Decoration Co.Ltd(002375) ; Pay attention to the integrated bathroom faucet Guangzhou Seagull Kitchen And Bath Products Co.Ltd(002084) .
Risk tips: the construction of affordable housing does not meet expectations, the development of fabricated technology does not meet expectations, and the market scale assumption deviates from the actual situation.
