Key investment points
There are signs of recovery in the north, but the overall sales across the country are generally facing cooling pressure. From the perspective of the transaction area of commercial housing in key cities in January, Beijing and Shanghai showed a pick-up. As of January 22, the cumulative transaction area of Shanghai was 1.198 million square meters, a year-on-year increase of 35.6% and a month on month increase of 12.8%; The cumulative transaction area in Beijing was 445000 square meters, with a year-on-year increase of – 6.4% and a month on month increase of – 0.9%; In addition, Chengdu, Nanjing and other cities have also warmed up, but on the whole, most other cities are still generally facing cooling pressure.
At present, the fundamentals are still in the downward stage, the sales investment is under pressure, and the funds in place are not smooth. According to the data of the Bureau of statistics, the sales amount in December was 2.0 trillion yuan, a year-on-year decrease of 17.8%, and the single month year-on-year sustained five months of double-digit negative growth; In December, the completed investment in real estate development was 1.0 trillion yuan, a year-on-year decrease of 12.9%; The purchased land area was 33 million m3, a year-on-year decrease of 33.2%. The annual cumulative land transaction price was 1.8 trillion yuan, a year-on-year increase of 2.8%; In December, the land transaction price was 0.32 trillion yuan, a year-on-year decrease of 4.2%. From the perspective of capital, the capital in place of real estate in December was 2.3 trillion yuan, a year-on-year decrease of 12.7%.
The deregulation and tightening of pre-sale funds are mutual, and local governments take measures such as reducing mortgage interest rates and relaxing provident fund to boost demand. This week, Yantai reduced the retention ratio of pre-sale funds by 5 and 3 percentage points respectively for development enterprises with AAA and AA credit ratings. The supervision amount of pre-sale funds in Fuzhou shall not be less than 1.2 times of the total project cost, which is further stricter than the previous policy. The current policy still takes “ensuring the delivery of buildings, people’s livelihood and stability” as the primary goal, and it is difficult to significantly relax the supervision of pre-sale funds in a short time. From the demand side, according to incomplete statistics, 14 cities across the country have taken house purchase incentives since January, mainly involving reducing the minimum down payment ratio of provident fund loans, increasing the maximum amount of provident fund loans, relaxing the application and recognition conditions, which is conducive to further releasing reasonable house purchase demand, alleviating the pressure of some cities’ own property market and boosting market confidence.
The central bank released liquidity to hedge industry risks, and LPR decreased for the first time in 21 months. On January 18, Liu Guoqiang, vice governor of the central bank, stressed that the current key goal is stability and the policy requirement is strength; First, make sufficient efforts to expand the monetary policy toolbox. Second, make accurate efforts. The financial sector should take the initiative to find good projects and optimize the economic structure; Third, we should act forward and respond to the general concerns of the market in a timely manner. The industry is currently facing the dual problem of “sluggish sales and liquidity of real estate enterprises”. Under the dual pressure of project payment and bond maturity peak in the short term, real estate enterprises still have a large risk of debt default, and credit support is conducive to hedging industry risks. On January 20, the central bank released LPR data for January. The 1-year LPR was 3.7%, and the 5-year LPR was 4.6%. The 5-year LPR decreased for the first time in 21 months. On the one hand, the interest rate cut will help reduce the cost of medium and long-term loans for real estate enterprises and better activate the investment and new construction intention of real estate enterprises in 2022; On the other hand, the reduction of mortgage interest rate will help to further activate the reasonable demand of home buyers and activate the trading market.
Investment suggestions: we believe that we should pay attention to five main investment lines at present: 1) development enterprises: Poly Developments And Holdings Group Co.Ltd(600048) , Seazen Holdings Co.Ltd(601155) , China Resources Land, Longhu group, China Vanke Co.Ltd(000002) , Xuhui holdings, China Construction Development International Holdings, etc; 2) Property management enterprises: Country Garden service, China Resources Vientiane life, Jinke service, Xuhui Yongsheng service, Baolong business, etc; 3) Liquor travel enterprises: Btg Hotels (Group) Co.Ltd(600258) , Fosun travel culture, Songcheng Performance Development Co.Ltd(300144) , Oct, etc; 4) Track transformation Enterprises: Tianjin Guangyu Development Co.Ltd(000537) , Lushang Health Industry Development Co.Ltd(600223) ; 5) Real estate brokerage Enterprises: shells, etc.
Risk tips: project delivery risk, project sales collection risk, industry policy regulation risk.
