On December 9, A shares and Hong Kong real estate stocks rose sharply. As of the close of the day, the mainland real estate sector of Hong Kong stocks continued to rise in late trading, closing up 11.78%, of which Rongxin China and Longguang Group rose 70.73% and 41.13% respectively, and more than 20 stocks rose more than 10%. The A-share Shenwan real estate sector recorded a 2.42% increase, while leading real estate stocks such as Vanke A, Poly Development, Metro Holdings and Jindi Group rose one after another.

Since November, the Hong Kong stock mainland real estate sector has risen by more than 92%, while the A-share Shenwan real estate sector has risen by more than 35%. Many theme funds betting on the real estate sector have also risen gratifying, hitting recent highs one after another, and many funds have risen by more than 30%.

Before November, real estate stocks were still "behind bars", and now they have become the "prettiest boys" in the market. How long can the real estate stock market last? There are any disturbing factors worthy of attention, institutions have given the latest point of view.

There is no dust in the real estate sector.

On December 9, Hong Kong's Hang Seng Index closed up 2.32%, the Hang Seng Technology Index rose 2.33%, the mainland real estate sector led the rise throughout the day, Renxin China rose 70.73%, Longguang Group rose 41.13%, Tianyu Real Estate rose more than 38%, Hejing Pacific Group rose more than 34%, and more than 20 stocks rose more than 10%.

In terms of A shares, funds returned to real estate stocks in the afternoon, Shenzhen property A, Gree Real Estate, World Union Bank rose by the daily limit, Metro Holdings rose more than 6%, and Dayue City, Vanke An and Jindi Group rose.

Over the past month, the Shenwan real estate index rose by 19.64%. The building materials sector, which accounts for most of the real estate industry chain, rose 14.15%, ranking third, second only to the food and beverage industry. In the Hong Kong stock Hang Seng composite industry index, the real estate construction composite index rose 30.3%, of which property services and management rose as high as 65.42%.

On November 29, the Shenwan real estate index even rose as high as 7.96%. On that day, five listed real estate-themed funds were directly closed by the daily limit.

As for active equity funds, many active equity funds betting on the real estate sector have seen their net worth rise by more than 20% in the past month. Baping funds are second only to Hong Kong Stock Connect funds, which are full of morale.

For example, in the western profit strategy, the net worth of A has increased by more than 30% in the past month, and most of its ten heavy stocks are real estate and real estate industry chain companies. In addition, Everbright Prudential quality Life An and Industrial upgrading An of Industrial and Commercial Bank of China have all increased by more than 20%. Index funds such as Warburg China Securities 800 Real Estate ETF have risen nearly 20 per cent in recent January.

Public offering fund Chong Cang real estate exceeds 100 billion yuan

Property stocks rose sharply, mainly boosted by recent positive policies.

On the whole, the continuous positive of the real estate sector has greatly improved the financing environment of real estate enterprises, dispelling the worries of the market on the previously uninsured entities of Baojiao buildings. The above policies are called "three arrows": "the first arrow"-16 items supported by financial credit, the "second arrow"-private enterprise bond financing support tool, and the "third arrow"-equity financing. So far, the stable real estate financing has formed the "three arrows" situation of credit, bond and equity financing.

CITIC believes that the simultaneous development of the three arrows will confirm the inflection point of the financing environment of real estate enterprises, and real estate fundamentals already have the pre-conditions for recovery. The most important observation point at the bottom of the market will return to commercial housing sales. Driven by both demand-side and supply-side policies, commercial housing sales are expected to recover significantly in the second quarter of next year, corresponding to residents' credit repair, social integration and broad credit landing.

The real estate sector is one of the heavy positions of public offering funds, and it is a typical representative of market value stocks and dividend stocks. The trend of the real estate market has greatly affected the net worth trend of public offering fund products.

Wind data show that the total market value of positions in real estate funds in the third quarter is 116.3 billion yuan, ranking in the forefront of the market capitalization of positions in major industries. Specifically, the number of funds holding real estate stocks is about 2700, of which 265 funds hold a market capitalization of more than 100 million, and 13 funds hold a market capitalization of more than 1 billion yuan. Tianxiang data show that the market capitalization of real estate stocks held by Xingquan trend, Dongzheng Ruixi A, Xingquan Light Capital, Jingshun Resources, ICBC Strategic Transformation A, ICBC Financial Real Estate An and so on exceeded 1 billion yuan at the end of the third quarter.

The active equity funds in the Chong Cang real estate sector include industrial upgrading of ICBC, Yong Ying Hui Tian Ying holding mix for one year, ICBC national strategy, Guotai Jinlu mix and so on. Index funds mainly include real estate ETF and dividend ETF, such as investment CS300 real estate, Shenzhen dividend ETF, real estate ETF and so on.

After the three arrows of the good real estate policy, the local good real estate policy is also coming. Recently, in order to alleviate the related problems and risks caused by the current real estate project shutdown and loan suspension, China Xinda Asset Management Co., Ltd., Henan Zhongyu Construction Investment Group Co., Ltd. jointly established a Henan real estate rescue investment partnership (limited partnership) with a registered capital of 10 billion yuan, with a registered capital of 10 billion yuan.

Recently, China Zheshang Bank signed comprehensive strategic cooperation agreements with Poly Real Estate, IPO shares, Cinda Real Estate, Greentown China, Chengfa Group, Minmetals Real Estate, Yuexiu Real Estate, Binjiang Group, Midea Real Estate and other real estate enterprises, providing a total amount of intentional financing of 160 billion yuan. Focus on real estate development loans, mortgage loans, M & A loans, bond underwriting and investment, pre-sale regulatory funds guarantee, internal insurance and foreign loans and other business areas, to carry out omni-directional and multi-level cooperation with contracted real estate enterprise groups to meet the reasonable financing needs of real estate enterprises.

Galaxy Securities pointed out that the supply-side "three arrows" support the bottom of the housing enterprise financing, the demand-side policy imagination space has also been opened, at this stage is the strongest support policy landing period since the downward cycle, supply and demand on both sides of the two-pronged approach is expected to help sales formally step into the road of recovery, optimistic about the plate repair market brought about by the policy resonance between supply and demand.

The real estate industry may bring upside surprises

At the same time, many fund managers give the layout strategy of the real estate sector in the latest point of view.

HyomiJie, an international fund manager at Fidelity, said the real estate sector could bring upside surprises, given its important role in the Chinese economy that affects consumer confidence and behaviour. If the Chinese government further relaxes its policy regulation on the real estate market, it will stabilize the market, promote national housing demand, and have a significant knock-on effect in the consumer market.

Liu Jie, fund manager of Ping an Fund, judged that as the pace of overseas interest rate increases gradually stabilized and the domestic economy stabilized under various policies, the overall investment sentiment in the equity market is expected to be gradually repaired. The current market style may tend to undervalue stocks and repair the valuation of consumer stocks damaged by the epidemic. Therefore, in the short and medium term, sectors such as consumer and real estate chains will have certain relative benefits.

Looking forward to next year, Zhang Jing, general manager of the equity investment department of Anxin Fund, believes that the economic recovery and the growth expectation of corporate profits are the key factors affecting investment opportunities. In terms of real estate, next year will be a stable process as a whole. Zhang Jing believes that the contraction in valuations is basically over, and corporate profits are expected to see a quarter-on-quarter rebound in economic policy next year, with the current valuations of many industry leaders at the post-historical 10% quantile. In this position, the future market is an upward process. After this year's stress tests, cyclical growth companies with relatively optimized industry patterns are likely to achieve better returns next year.

The real estate leader of central and state-owned enterprises is one of the investment opportunities that Zhang Jing pays close attention to. He believes that the real estate policies of central and state-owned enterprises have been relaxed continuously since the first half of 2022, and the Ministry of Housing and Construction also said that the policy of stabilizing real estate should be implemented in the second half of the year. From meeting only the "rigid demand" to meeting the "rigid demand and reform", various policies are beneficial to the stock of high-quality real estate enterprises.