Zhitong Financial APP learned that CITIC released a research report saying that the sales volume and area of sample enterprises fell 55 per cent and 56 per cent respectively in May 2022 from a year earlier, which was basically the same as the decline in April, and increased by 11 per cent and 10 per cent respectively compared with the previous month, showing signs of marginal recovery.The bank believes that the marginal recovery of sales data indicates that the bottom of market fundamentals may have appeared, the accumulation of demand-side policies and the weakening impact of local epidemics further promote the recovery of market confidence, and real estate sales are expected to continue to improve in the second half of the year.The differentiation of enterprise performance is intensified, and the market advantages of high-credit enterprises with strong development ability, high delivery certainty and guaranteed housing quality are gradually highlighted. Be optimistic about the housing transaction service platform KE Holdings Inc. (BEKE.US), and the blue chips of high credit and efficient real estate development, including Poly Development (600048.SH), Jindi Group (600383.SH), Vanke A (000002.SZ), Merchants Shekou (001979.SZ), Midea Real Estate (03990), Binjiang Group (002244.SZ), etc.
CITIC's main points are as follows:
The marginal improvement in new home sales is worth looking forward to.
The sales of the 18 sample enterprises tracked by the bank in May 2022 were 274.3 billion yuan, down 55 per cent from the same period last year (56 per cent in April), up 11 per cent from the previous month (21 per cent in April); and the sales area was 18.26 million square meters, down 56 per cent from a year earlier (56 per cent in April) and up 10 per cent from a year earlier (18 per cent in April). In terms of cumulative data, from January to May, the sales amount of the sample enterprises decreased by 48% compared with the same period last year, and the sales area decreased by 46% compared with the same period last year. The second-hand market has shown signs of warming, and the marginal improvement in new home sales is also worth looking forward to.
The market is still worried about delivery.
In May, the differentiation of the sales performance of the sample enterprises tracked by the bank intensified, with the sales value of high-credit enterprises falling 42% from the same period last year, down significantly from the 48% decline in April, while the sales value of general credit enterprises fell 76% from the same period last year, further expanding from the 74% decline in April. The change of the average house price of different enterprises also showed the opposite trend. In May, the average sales house price of high credit enterprises was 15190 yuan per square meter, up 2% from the previous month; the average sales house price of general credit enterprises was 12864 yuan per square meter, down 4% from the previous month. The bank believes that since the outbreak of the real estate credit crisis in the second half of 2021, the new housing market has been facing delivery problems. On the one hand, this may make new houses perform worse than second-hand houses, on the other hand, it also makes high-credit companies perform better.
The effect of demand-side policy backing is beginning to show.
In May, the central and local governments issued a number of policies on the real estate demand side. The five-year LPR interest rate was reduced to 4.45%, and the minimum pricing limit for first-home mortgage rates was lowered to 4.25%, which is 138bp from the weighted average interest rate gap of personal housing loans at the end of 2021. Various localities have also issued a number of demand-side policies with restrictions on sales, prices, purchases and loans as the core to stimulate market demand and maintain the healthy and steady development of the industry. The bank believes that the May corporate sales data show that the accumulation of demand-side policies is beginning to play a supporting role in the industry's downward cycle, and that the market is expected to accelerate recovery in the second half of the year, taking into account the lag of policy effects.
The impact of the local epidemic is gradually weakening, and the cumulative demand may be released.
Real estate sales in major cities affected by the local epidemic have been affected to varying degrees, and the bank estimates that as many as 30-40% of the sales sites across the country may have adopted current-limiting or closed management measures during the maximum closure period. At present, phased progress has been made in the prevention and control of the epidemic in Beijing and Shanghai, and the national economic and industrial order is expected to be restored in June. The bank believes that most of the housing demand will not disappear as a result of the epidemic, as the impact of epidemic prevention and control weakens, suppressed housing demand may usher in a more concentrated release, early affected eastern China is expected to rebound.
Risk factors:Individual cash-strapped development enterprises have the possibility of credit risk. The risk that the epidemic may rebound in some areas. Corporate profitability has been greatly affected, the statement is the embodiment of history, 2022 reporting results are likely to be under pressure.