Source: Broker China

Today,$China Vanke Co.,Ltd. (000002.SZ)$A huge number of orders closed to the bullish and trading board,$CHINA VANKE (02202.HK)$At one point, it soared to nearly 20%, and Vanke's domestic debt generally rose. Meanwhile, the A-share real estate sector surged by more than 6%, and the Hong Kong domestic housing stock sector surged more than 9%. Most importantly, Vanke's rise and fall volume has also reached its highest value since the Baowan dispute.

Judging from the trend, the North China Capital once again bought nearly 13.7 billion yuan this morning. This means that there is a lot of money entering the stock market. So, with so much money entering the market and going long, what did they actually see? Industry researchers believe that fundamentals are pressured to strengthen policies that anticipate a shift in global liquidity or lead to a “mistaken” rebound. In addition, small essays such as “Downplay the Three Major Projects” were published in the market today, which also stimulated the market's enthusiasm to do more.

Vanke detonated

Haven't seen you in 8 years! Today, Vanke A was blocked and stopped by a huge number of orders. As of 2 p.m., the turnover rate had already exceeded 5%, and Vanke's enterprise had soared by nearly 20%. Vanke's domestic debt generally rose. “220,000 Ke 04” rose more than 7%, “210,000 Ke 04” rose more than 6%, “220,000 Ke 06” rose 6%, “200,000 Ke 06” rose nearly 5%, and “200,000 Ke 08,” “220,000 Ke 05,” and “210,000 Ke 02” all rose more than 3%.

Not only Vanke, real estate stocks have exploded almost everywhere. More than 20 stocks, including Huaxia Happiness, Rongsheng Development, Dalong Real Estate, and Jindi Group, rose and stopped.

Tianfeng Securities believes that on April 26 and April 29, the real estate sector rebounded sharply for two consecutive days, mainly due to popular opinions issued by foreign-funded institutions, with large net inflows of capital to the north; according to the news, it is rumored that the purchase restrictions were gradually lifted after May 1st, and that Changsha and Chengdu substantially lifted purchase restrictions within this week, strengthening and easing expectations; a high-level meeting for the first quarter is about to be held to lay out the incremental capital policy in advance. Factors such as short-term policies or accumulation of stocks and storage, government establishment of storage agencies, increased expectations for stock reform and insurance, and the fact that insured housing enterprises have room to benefit are affected.

According to China Merchants Securities, attention to the real estate sector has increased recently, and the focus can be summarized into two categories: the first category is continuing expectations for more policies from the perspective of fundamental pressure, not limited to demand-side and supply-side policies; the other category focuses on the possibility of a change in style regardless of changes in global liquidity or domestic liquidity.

Is it a short-term game or is it meant for the long term?

In the last two trading days, positive news about real estate has indeed appeared frequently. Today, small essays such as “Downgrading the Three Major Projects” have also been published. So, is the new capital actually a short-term game or is it intended for the long term?

Some agencies believe that the three major projects are key tasks for this year and even the next few years, but since the new “land-sitting” model is still being explored, the amount of urban village renovation in 2024 may not be significant. However, the gradual increase in the scale of future construction is still a probable event.

Currently, there is a real need to go to inventory, and there are explorations everywhere. Nanjing and Zhengzhou are also doing it, but the core is still the investment of local governments. Considering that local finances are tight, it is unlikely that the local government will spend a lot of money to stock it. Currently, only the central government has more resources to help remove inventory.

Recently, core Tier 1 and 2 cities, including Chengdu, have gradually been liberalized, but the pace may still maintain a “small step run fast”, and policies may not be that strong. Furthermore, not only deeds tax, but also transactional taxes such as value-added tax and personal income tax need to be adjusted. Also, there are some people who have high expectations for the policies introduced at the high-level meeting, and may start a wave of hype ahead of time.

Judging from the logic of the hype, the market's tendencies are basically policy rather than fundamentals. Current policy expectations are positive, but this is largely not the case. Judging from current fundamentals, data from China Merchants Securities shows that the new housing transaction area in the sample cities from April 1 to April 25 decreased by 39% year on year, and the second-hand housing transaction area decreased 11% year on year. The year-on-year decline both narrowed, but the year-on-year decline narrowed or contributed more to the decline in the base figure, and the average daily transaction level can also reflect this. Recently, the average daily transaction area of new homes is still at its lowest level in the past 5 years, and the second-hand housing transaction area was only higher than the same period in the past 5 years.

Will this time be any different?

In fact, this is not the first game policy. So will this time be any different?

Currently, market transactions are still at the bottom, and expectations for “Xiaoyangchun” after the Spring Festival are too high or are undergoing downward revisions. Looking back at the March Bureau of Statistics's real estate data, “Xiaoyangchun” did not perform well. Even though some first-tier cities performed well in the Xiaoyangchun market, their influence was weakened by the increase in second-hand housing supply (listing). The sales watershed reflected in historical experience of rising and falling housing prices did not work. The market still showed the characteristics of price in exchange for volume. This is actually the result of improved demand but the difficult relationship between supply and demand.

China Merchants Securities believes that current market sentiment may focus on real estate from a broader perspective of style change. In the past, people's livelihood, risk prevention, and the economy were the three important dimensions of policy attention. Currently, these three dimensions may collectively point to further easing. Looking at current market sentiment, the market's expectations for further strengthening policies on both sides of the supply and demand side may be strengthened. This expectation may not be very similar to the situation where they only participated in the real estate and industrial chain stock policy game in the past. It may also be difficult for a wider range of market participants not to pay attention to real estate due to potential allocation requirements due to style changes.

The background of this round of increased market attention may be different from March. Since the beginning of the year, real estate stocks have experienced a wave of rebound in March due to “V” changes in fundamentals and credit expectations, leading to a rebound in prices in the real estate sector, industrial chain stocks, and bonds. Looking at it now, what is different from that time is that some investors expected a restoration of sales fundamentals at the time, but now the pressure on fundamentals is driving investment downward, raising expectations for more policies. At the same time, credit expectations are also different from those days. At the time, I felt the positive possibility of new capital emerging from individual housing companies' announcements, but now the market is watching the progress and evaluation stage of different types of inventory removal policies (demand side and supply side) in some cities, and has some observation point premiums.

edit/lambor