Event: At 9:00 am on March 5, 2022, the opening meeting of the Fifth Session of the Thirteenth National People’s Congress was successfully held. Premier Li Keqiang of the State Council stated in the government work report that in the face of new downward pressure, stable growth should be placed on more The prominent position supports the commercial housing market to better meet the reasonable housing needs of buyers.
Investment Points
Steady increaseChanghePreventing risks requires stabilizing real estate: the 2022 economic development goals are mentioned in the government report of the two sessionsGDP+5.5%，CPI+3%, for the new downward pressure, stable growth should be placed in a more prominent position. The real estate industry chain has a significant impact on GDP, and the downward pressure on both supply and demand in the industry in 2021H2 will continue until February 2022. The GDP growth target of 5.5% has been clarified, and stable growth can only be achieved by stabilizing real estate; to prevent and resolve major risks, it is necessary to resolve risks in the real estate industry first. We believe that the “market-oriented and legal-based approach to resolve hidden risks” does not mean to revive all risk-prone companies. The supply side of the industry should continue to promote structural optimization on the basis of resolving risks, so that high-quality companies can embrace the spring after the optimization of the industry structure.
The development trend of simultaneous rental and purchase is clear: this meeting mentioned that it is necessary to accelerate the development of the long-term rental market, promote the construction of affordable housing, and better meet reasonable needs for commercial housing. Combined with the State Council Information Office meeting held on March 2, we believe that the trend of policy guidance to establish a multi-level supply market is clear, the construction of rental housing will increase, and the commercial housing market will support reasonable demand around “new citizens” (the central bank and the China Banking and Insurance Regulatory Commission will issue documents soon). “New citizens” refer to those who have already lived in cities and towns, but do not have a household registration; or those who have just obtained their household registration for less than two or three years. According to the statistics of the central bank, the population is about 300 million.
It is expected that the relaxation of city-specific policies will increase: at the beginning of March, the relaxation of some cities has been escalated, Zhengzhou has eased purchase restrictions and loan restrictions, Jinzhong has eased the down payment ratio, and Jimo has eased sales restrictions. The trend of industry relaxation is basically in line with our in-depth report “What are the Paths to Repair the Real Estate Industry” released on February 11? Considering that the sales of the top 100 real estate companies in January-February are still weak, and the two sessions have set the tone for stable growth + risk prevention, we believe that after the two sessions, the relaxation of city-specific policies in various cities will be upgraded compared with February. Loan restrictions and sales restrictions are extended, and industry fundamentals are expected to bottom out in March (focus on indicators such as sales visits and sales rates of key real estate companies in March).
Investment suggestion: Strengthened policy correction + industry expected bottoming and restoration will bring multi-track investment opportunities in the real estate sector.
1) Development track: After the Two Sessions, policy rectification has been intensified, the Beta market of the sector has continued, and the goal of resolving industry risks is clear. The stability of the blue-chip bid + the optimization of the industry structure, continue to be optimistic:Poly Development、China Merchants Shekou、China Resources Land、China Overseas Development、Vanke A、Gemdale Group、Longfor GroupandGreentown China. Financial stability + high-quality layout of “small but beautiful” targets: C&D International,Riverside Group. High-quality private enterprises are more resilient to repair, continue to be optimistic: CIFI Holdings,Newtown Holdings、Jinke shares。
2) Property track: The risk resolution of related real estate companies promotes the restoration of the valuation of property companies, and property companies with greater independence have better long-term growth. Leading robust class targets:China Resources Vientiane Life、Poly Property、China Overseas Property、Greentown Service. Elastic target: CIFI Yongsheng,Jinke ServiceAnd Xincheng Yue.
3) Agency construction track: The increase in rental housing supply is a new growth track in 2022, and the supply can be increased through new construction or stock renovation. In 2022, the new construction of rental housing will increase, and we will pay attention to the opportunities of agency construction. Related targets:Greentown Management Holdings。
Risk reminder: Risk events of individual real estate companies interfere with the repair of sector valuations.
(Article Source:Zheshang Securities）