● Our reporter Wang Hui
Influenced by the launch of heavy new policies by multiple departments, the steady recovery of A-share market sentiment and other factors, the real estate sector has continued to rise recently, and many leading real estate companies' individual shares have risen more than 50% since the end of April. On May 22, the real estate market was further fermented. Judging from the recent relevant developments and research judgments in the private equity industry, many front-line private equity companies have characterized this round of real estate market as "medium-term repair", and there are relatively few institutions involved in large-scale position building and position increase.
On the whole, the proportion of private equity institutions expected to achieve "fundamental inversion" in the real estate sector is relatively limited; At the same time, some private placements predict that the current round of real estate market may only reach the "mid market" stage.
Most predict "medium term repair"
As for the recent research and judgment on the fundamentals of the real estate sector and related industrial chains, the reporter of China Securities Journal found in the interview that the consensus of the current front-line private equity institutions is "medium-term repair".
Jiang Jingwen, president of Wukong Investment Research, said that since this year, the macro policies on the real estate market have "continued to increase in general". On the one hand, the performance of the real estate industry in the past few years was unsatisfactory, which had a certain impact on the economy, and the policy side has always been actively responding; On the other hand, the main focus of the market is policy strength. From the perspective of the recent policy mix, from both the supply and demand sides, the medium-term policy effect is worth looking forward to.
Bao Xiaohui, Chairman of Changli Assets, believes that after the launch of this round of new policies, the overall situation of the real estate market and the fundamentals of real estate development enterprises are expected to recover in an all-round way. However, the positive impact of relevant policies on the real estate market and the real estate industry is more "medium-term repair", which cannot be determined as a fundamental reversal at present, and the follow-up may also depend on the feedback of market demand, transactions and other aspects.
Zhang Shiying, a senior analyst of Shicheng Investment, further said that the policy strength exceeded the market expectations, which helped to stabilize the confidence of market players in the short term. It was obviously good for real estate developers, building materials and household appliances and other industrial chains. The actual long-term policy effect remains to be observed. In the future, it is necessary to track the turnover of new and second-hand houses, the demand for rebar and other indicators.
The founder of a medium-sized private equity firm in Shanghai believes that the housing prices in the first and second tier cities will take the lead in stabilizing, thus achieving a smooth landing of the real estate market and the real estate industry. It is possible for relevant industries to realize "fundamental inversion" in the future, and the bottom may have appeared in the medium and long term.
The favorable market of chip structure continues
It is not difficult to find out the position of comprehensive public and private institutions since 2023. Institutional investors, especially public offerings, have been under allocated in the real estate sector for a long time. According to the latest interview of China Securities Journal reporters in the private equity industry, the number of private equity institutions that have recently been heavily involved in real estate stocks is also small. Many interviewed private equity institutions have revealed that they have not increased their positions in real estate stocks significantly with the rise of the market. At the same time, many private equity professionals frankly said that the current overall chip structure of the real estate sector is relatively conducive to the continuation of the market.
Bao Xiaohui said that according to his observation, "institutional investors such as public offering, private placement and foreign investment have held low positions in the real estate sector since last year. Everyone is' cautious' and the market consensus of the sector is weak".
Zhang Shiying believes that since 2021, the A-share real estate sector as a whole has been in a state of capital shock outflow. "This structure of undervalued sectors and low institutional positions is also the key reason for the recent sharp rebound of the real estate sector.".
From the perspective of the medium-term outlook of the current round of real estate market, there are big differences in the private equity industry. Cui Lei, general manager of Zhaowan Assets, said in an interview that the capital market's concern about the real estate sector has eased significantly, which is conducive to the recovery of market risk appetite; However, since 2021, the number of A-share investors participating in the real estate sector has continued to decline, and the conditions for long-term gaming of related individual stocks may not be sufficient. The attributes of this round of market are similar to event driven theme investment opportunities.
The founder of the aforementioned Shanghai medium-sized private equity institutions told the China Securities Journal that the long-term low allocation of institutions and the key marginal changes in fundamentals can often push up the relevant sectors to launch a round of super expected medium and long-term market, and they are optimistic about the medium and long-term trend of real estate stocks.
Related industrial chains see the rise of sentiment
It is worth noting that while the private equity industry is debating the future of the real estate sector, there seems to be more institutions optimistic about investment opportunities in the relevant industry chain.
Cui Lei said that the release of relevant policies has greatly eased investors' potential cautious expectations and boosted market risk appetite. In this context, investors should increase their investment in manufacturing companies, including the real estate industry chain that can continue to benefit.
Bao Xiaohui said that he was more optimistic about the long-term performance of household appliances, insurance (some insurance institutions had certain debt and equity assets in the real estate industry in the early stage) and other sectors strongly related to real estate.
Jiang Jingwen also believes that in the real estate industry chain, more attention should be paid to the medium - and long-term industrial trends in some directions, such as some cyclical varieties with tight supply and demand balance, which can benefit from the "overseas logic" of home appliances and construction machinery, and investors can further optimize the investment allocation in relevant directions.
Mingyu Assets said that at this stage, the market is expected to turn, which is expected to drive the valuation of the real estate sector to continue to repair, and the high-quality leading role of the relevant industrial chain deserves special attention.
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