Core view
Market review this week. In the third week, the real estate sector index was stronger than the CSI 300 index and the gem index. The relative return of the real estate sector compared with the CSI 300 index was + 1.1%. The CSI 300 index closed at 4779.31, with a weekly increase of + 1.1%; The gem index closed at 3034.68, with a weekly increase of – 2.7%; The real estate sector index closed at 3473.93, with a weekly increase of + 2.2%.
Industry highlights this week. The central bank said that in 2022, it will adhere to the monetary policy of stability and seeking progress in stability. The MLF operating interest rate in January was 2.85%, down 10 basis points from the previous month. The LPR quotation was released in January, which was lowered to 3.7% in one-year period and 4.6% in five-year period. The Ministry of housing and urban rural development said that it would implement the long-term mechanism of real estate and prepare to build 2.4 million affordable rental houses throughout the year. The national development and Reform Commission said it would promote the large-scale development of green buildings and low-carbon buildings. Evergrande proposes to hire CICC and BOC International as financial advisers.
Sales of new houses decreased this week compared with last week, and sales of second-hand houses decreased compared with last week. In the third week, the sales of new houses in 29 major cities was 29000 units, a decrease of 7.4% compared with the second week; The sales of second-hand houses in 11 major cities were 8000 units, a decrease of 8.7% compared with the second week; Compared with the second week, the growth rates of new housing and second-hand housing transactions in first tier cities were – 15.3% and – 4.5% respectively; Compared with the second week, the growth rates of new housing and second-hand housing transactions in second tier cities were – 10.4% and – 12.1% respectively. Inventory decreased compared with last week, and inventory sales increased compared with last week. As of the third week, the inventory of 15 major cities was 1.231 million units, a decrease of 1000 units compared with the second week; The stock to sales ratio was 13.1 months, an increase of 0.2 months over the second week. The land market transfer heat this week increased compared with last week. In the third week, a total of 40 pieces of land were sold in 26 major cities, an increase of 39 pieces compared with last week. The amount of land transfer increased. In the third week, the land transfer fee of 26 major cities was 24.44 billion yuan, an increase of 24.1 billion yuan compared with the second week. The average premium rate increased. In the third week, the average premium rate of land transactions in 26 major cities was 3.2%, an increase of 3.2 percentage points over the second week. In the third week, the number of land auction in 26 big cities was 0.
Announcement of key companies. China Calxon Group Co.Ltd(000918) , Yango Group Co.Ltd(000671) , Beijing Airport High-Tech Park Co.Ltd(600463) important shareholders reduce their shares of the company. Hangzhou Binjiang Real Estate Group Co.Ltd(002244) new plot reserve. Grandjoy Holdings Group Co.Ltd(000031) holding subsidiary completed bond issuance.
Investment proposal and investment object
This week, the central bank lowered the MLF operating interest rate, and the LPR quotation was lowered accordingly. The LPR over the five-year period was also lowered by 5bp, and the signal of steady growth was more obvious. After the rise of A-share real estate stocks since the new year of 2022, investors hope to see more real estate support policies from top to bottom. We believe that the current industry fundamentals are still inertial downward. At the same time, low and medium rated real estate enterprises are still in the dilemma of debt crisis, and the existing policies can not improve their credit status. We believe that the policy is expected to be more relaxed with high certainty. Under this combination of fundamentals and policies, we focus on the valuation repair of real estate enterprises with financial security in the short term. We are optimistic about the first-line leaders with stable performance, and recommend Poly Real Estate (600048, buy), China Vanke Co.Ltd(000002) (00000 2, buy); Second tier leaders with flexible performance are recommended Gemdale Corporation(600383) (600383, buy) and Longhu group (00960, buy). At the same time, we are optimistic about the property management and business management industries with rapid growth and strong consumption attributes. We recommend Country Garden Service (06098, buy), poly property (06049, buy), China Merchants Property Operation & Service Co.Ltd(001914) (001914, increase in shareholding), New Dazheng Property Group Co.Ltd(002968) (002968, buy), rongchuang service (01516, buy), Xingsheng business (06668, buy).
Risk tips
Sales were significantly lower than expected. The counter cyclical policy was less than expected. Interest rates have risen significantly.
