◎Due to the high base of growth in the real estate market in the first half of last year, the first half of this year is still not optimistic from the data level. It is expected that the “Xiaoyangchun” sales starting in March this year may achieve marginal improvement. Therefore, from the fourth quarter of 2021 to the first quarter of 2022, the fundamental data is likely to continue to decline, and the policy warmth will be more obvious. This period is the best time to allocate the real estate sector.
Following the strong rebound in real estate stocks last Friday (January 7), today (January 10) real estate stocks reappeared in a general rally.
As of today’s close, among the A-share Shenwan primary industries, the real estate sector rose 1.26%; the H-share real estate sector rose 0.98%.
In the A-share market, New Hualian, Sanxiang Impression and Shimao shares all rose by their daily limit, among which, New Hualian rose by the daily limit for three consecutive trading days; Seazen Holdings and Cinda Real Estate rose by more than 4%; Zhongnan Construction and Binjiang Group rose by more than 3%; Vanke A, Poly Development, Greenland Holdings, and OCT A also all rose.
In the Hong Kong stock market, Shimao Group topped the list with an increase of 19.1%, Sunac China, China Aoyuan and Agile Group increased by more than 10%, Yuzhou Group, CIFI Holdings Group, R&F Group, Logan Group increased by more than 5%, Xiangsheng Group Holdings Group, Times China Holdings, Zhongjun Group Holdings, Powerlong Real Estate, KWG, and Territory Holdings rose more than 4%.
The performance of some real estate stocks in A shares today
Multiple positives support fundamental improvement
The general rise of real estate stocks today may be related to the recent multiple positive news.
Today, there was news that 9 central state-owned enterprises including Poly, OCT, and China Merchants Shekou were required to provide liquidity support for 11 housing companies with medium and high risks by acquiring and acquiring project assets. Both rose today.
In addition, there has been news recently that high-quality real estate companies have made debt-based acquisitions of enterprise projects out of danger, and related M&A loans are no longer included in the relevant indicators of the “three red lines”. Earlier on December 20, 2021, the central bank and the China Banking and Insurance Regulatory Commission issued the “Notice on Doing a Good Job in M&A Financial Services for Risk Disposal Projects of Key Real Estate Enterprises”, which also mentioned the mergers and acquisitions of real estate enterprises. At the end of December last year, Zou Lan, director of the Financial Market Department of the Central Bank, once said that project mergers and acquisitions among real estate companies are the most effective market-based means for the real estate industry to resolve risks and achieve clearing.
The performance of some real estate stocks in H shares today
Huatai Securities believes that this wave of defaults by private real estate companies will push the real estate financing policy from comprehensive restrictions to structural encouragement, and new channels represented by M&A financing may break the financing dome that has lasted for nearly five years.
“In 2021, the sales performance of real estate companies will remain strong, and the annual cumulative sales performance of the top 100 real estate companies will only decrease by 3.5% year-on-year. While the sales threshold of each echelon of the top 100 real estate companies continues to increase, the scale growth rate also shows a certain differentiation, and industry competition further intensified.”
Zhang Bo, president of 58 Anju Room Real Estate Research Institute, told the “Daily Economic News” reporter that the above-mentioned good news, on the one hand, can enable housing companies to better realize project expansion through mergers and acquisitions; on the other hand, some problem housing companies’ projects It can be better decomposed, and it will also help enterprises to withdraw funds.
Data from CRIC shows that in 2021, the threshold for the sales volume of TOP10 real estate companies will reach 287.95 billion yuan, a year-on-year increase of 19.8% and an increase of 42% from 2019. The threshold of sales transaction amount for TOP20 and TOP30 real estate companies also increased by 9.2% and 2.5% year-on-year respectively, achieving a steady increase in scale.
The best time to configure the real estate sector?
“The industry policy has bottomed out. Under the guidance of a ‘virtuous circle’, the continuous improvement of the credit environment will bring benefits to market transactions.” A leading real estate company IR told the “Daily Economic News” reporter that real estate stocks are relatively low The valuation level may make it have periodic relative returns, and periodic allocation can be carried out to drive the bottom of the market to be repaired. Currently, it is the best time to allocate the real estate sector.
CITIC Construction Investment believes that due to the high base of real estate market growth in the first half of last year, the first half of this year is still not optimistic from the data level, and it is expected that the “Xiaoyangchun” sales starting in March this year may achieve marginal improvement. Therefore, from the fourth quarter of 2021 to the first quarter of 2022, the fundamental data is likely to continue to decline, and the policy warmth will be more obvious. This period is the best time to allocate the real estate sector.
“In the past six months, real estate stocks have been performing poorly. Although some real estate stocks have occasionally risen sharply during this period, they have been ‘returned to their original shape’ immediately after the big rise.” Zhang Bo told reporters that this wave of real estate stocks has risen. In the market, for some institutional investors and some retail investors, it is relatively safe to buy funds and may be a relatively low-cost time point.
“Since the end of last year, the housing loan environment in many cities has continued to improve, mortgage interest rates have fallen, and the loan period has shortened. In the land market, the third batch of centralized land supply has generally relaxed the transfer rules and lowered the threshold for land acquisition, which is conducive to real estate companies. At the same time, Since December last year, local adjustment policies have been introduced intensively, and it can be expected that in the first quarter of this year, the policy space for stabilizing real estate market demand will become larger in various regions.”
Regarding this year’s real estate market, Zhang Bo said, “This year is the starting point of a new real estate cycle, characterized by reduced volatility, prolonged time, and urban differentiation. It will take time for sales to recover, and it is expected to stabilize in the second quarter. Completion and restoration are certain and sustainable. , but the strength may be weaker than last year. In the first half of this year, the issuance of credit to housing enterprises will gradually strengthen.”
(Original from Magnesia Real Estate, if you like it, please pay attention to WeChat meikedichan)
Source of cover image: Photo Network-500450702
