Key investment points
Last week (2024.6.17-2024.6.21, the same below): Last week, the real estate sector (CITIC) rose or dropped by - 5.4%, while the CSI 300 and Wanda All A indexes rose or dropped by - 1.3% and - 1.5% respectively, and the excess earnings were - 4.1% and - 3.9% respectively. Real estate ranked 29th among 29 CITIC industry sectors.
Real estate fundamentals and high-frequency data:
(1) New house market: the transaction area of new houses in 37 cities last week was 2.51 million square meters,+33.6% month on month and - 15.5% year on year. From June 1, 2024 to June 21, 2024, a total of 6.293 million cubic meters was transacted, - 29.6% year-on-year.
As of June 21 this year, a total of 50.224 million cubic meters had been transacted, - 39.0% year-on-year.
(2) Second hand housing market: the transaction area of second-hand housing in 16 cities last week was 1.808 million square meters,+28.9% month on month and+88.8% year on year. From June 1 to June 21, 2024, 4.798 million cubic meters will be transacted accumulatively,+14.4% year on year. As of June 21 this year, a total of 34129000 cubic meters had been transacted, or - 8.7% year on year.
(3) Inventory and decontamination: the cumulative inventory of new houses in 13 cities is 88.449 million m3, - 2.9% month on month,+2.1% year on year; The deconstruction cycle of new houses in 13 cities is 24.1 months, with a month on month change of - 1.0 months and a year on year change of+8.9 months. The urbanization cycle of the first tier, new first tier, second tier, third tier and fourth tier cities is 18.9 months, 13.8 months, 23.8 months and 49.8 months, with the month on month changes of - 0.3 months,+0.3 months, - 6.2 months and - 1.2 months respectively.
(4) Land market: from June 17, 2024 to June 21, 2024, 464 pieces of land will be supplied by 100 cities, with a month on month ratio of+43.2% and a year on year ratio of+13.4%; The construction area of land supply was 22.946 million square meters,+46.8% month on month and - 6.8% year on year. As of June 21, the cumulative supply of land in 2024 was 12460, - 4.6% year-on-year, and the cumulative supply of building area was 643.227 million cubic meters, - 23.0% year-on-year.
Key data and policies: at the central level: the Ministry of Housing and Urban Rural Development held a video conference on affordable housing work, saying that all regions should promote cities above the county level to vigorously, orderly and effectively carry out the purchase of existing commercial housing stocks as affordable housing. Local level: Chengdu supports employees who pay in other places to apply for housing provident fund loans. A total of 206 commercial housing projects in Guangzhou participated in the "old for new" activity, involving 68 real estate development enterprises and 67 intermediaries. Suzhou and Zhongshan adjust the provident fund policy; Lanzhou abolished purchase restrictions, implemented housing subsidies, adjusted the provident fund loan policy, and carried out the activity of replacing old with new.
Foshan and Ziyang launched a white list policy.
Zhou's point of view: In the third week of June, new house transactions declined year on year and rose month on month, while second-hand house transactions rose month on month, with considerable year-on-year growth. Recently, the People's Bank of China and the Ministry of Housing and Urban Rural Development have held meetings to promote the orderly and effective purchase of commercial housing stocks by local governments, and the subsequent implementation of the purchase and storage policy is expected to be accelerated. We expect that with the policy gradually taking effect, real estate sales are expected to gradually improve. Recommendations: 1) High quality target with stable finance and concentrated soil reserves in core cities. Recommended by: Poly Development, China Merchants Shekou, Binjiang Group, China Resources Land, Yuexiu Real Estate, Huafa Shares. Suggested attention: Vanke A; 2) Real estate enterprises with abundant high-quality property assets and cash flow expected to marginal improve. Recommended: Xincheng Holdings, Jindi Group, recommended to focus on: Longhu Group; 3) Property companies: China Resources Vientiane Life, Poly Property, Greentown Service, Yuexiu Service; 4) Agent construction and intermediary companies: Greentown Management Holdings, Shell.
Risk warning: the relaxation of real estate regulation policies was not as expected; The industry continued to decline, and sales fell short of expectations; The credit risk of the industry continued to spread, and the liquidity deteriorated more than expected.
