The Zhitong Finance App learned that Kerry published an article stating that China's real estate market will continue to operate at a low level from January to April 2024. In April, TOP100 real estate companies achieved sales transaction amounts of 312.17 billion yuan, a decrease of 12.9% month-on-month and a year-on-year decrease of 44.9%. The monthly performance scale remained at a historically low level. In terms of cumulative performance, the top 100 housing enterprises achieved sales transaction amount of 1091.41 billion yuan in January-April, a year-on-year decrease of 46.8%, and the decline narrowed by 0.7 percentage points.
In April 2024, the sales threshold for each tier of the top 100 real estate enterprises was further lowered compared to the same period last year, and the thresholds were all lowered to the lowest level in recent years. Among them, the sales transaction amount threshold for TOP10 real estate enterprises was reduced by 57.3% year-on-year to 25.88 billion yuan. The thresholds for TOP30 and TOP50 housing enterprises were also reduced by 52.6% and 51.1% year-on-year, respectively, to 6.87 billion yuan and 4.48 billion yuan. The sales transaction threshold for TOP100 real estate companies was lowered by 47.7% to 1.85 billion yuan.
01 Contract sales
The performance of the top 100 real estate companies in April decreased by 44.9% year on year
Core views:
1. From January to April 2024, China's real estate market continued to operate at a low level. In April, TOP100 real estate companies achieved sales transaction amounts of 312.17 billion yuan, a decrease of 12.9% month-on-month and a year-on-year decrease of 44.9%. The monthly performance scale remained at a historically low level. In terms of cumulative performance, the top 100 housing enterprises achieved sales transaction amount of 1091.41 billion yuan in January-April, a year-on-year decrease of 46.8%, and the decline narrowed by 0.7 percentage points.
2. In April 2024, the sales threshold for each tier of the top 100 real estate enterprises was further lowered compared to the same period last year, and the thresholds all dropped to the lowest level in recent years. Among them, the sales transaction amount threshold for TOP10 real estate enterprises was reduced by 57.3% year-on-year to 25.88 billion yuan. The thresholds for TOP30 and TOP50 housing enterprises were also reduced by 52.6% and 51.1% year-on-year, respectively, to 6.87 billion yuan and 4.48 billion yuan. The sales transaction threshold for TOP100 real estate companies was lowered by 47.7% to 1.85 billion yuan.
3. Judging from corporate performance, the monthly performance of the top 100 housing enterprises increased month-on-month in April 2024, and the housing enterprises whose monthly and cumulative performance declined year-on-year also accounted for nearly 90%. The number of companies whose monthly performance dropped by more than 50% year on year reached 45, and overall performance showed a general downward trend year over year. In January-April, there were only 21 housing enterprises with a total transaction amount exceeding 10 billion dollars in the top 100 housing enterprises, compared to 45 and 47 in the same period in 2023 and 2022, respectively. Even with full-caliber sales, there are only 25 housing enterprises worth over 10 billion dollars.
02 Company land acquisition
Continuing the slight recovery trend, investment focuses on core locations
Core views:
Investment by typical housing enterprises in January and April continued the recovery trend since February. CRIC focused on monitoring 30 housing companies' investment amounts of 43.9 billion yuan, an increase of 14% over the previous year, but due to the high base last year, it still fell 61% year over year. The land acquisition area was 2.17 million square meters, an increase of 38% over the previous year and a decrease of 66% year on year. Specifically, the amount of land acquired by C&D, Binjiang (002244.SZ), and Longhu (00960) reached 16.3 billion yuan, 7.4 billion yuan, and 6.4 billion yuan respectively, ranking in the top three. Among them, C&D has made gains in core cities such as Xiamen, Shanghai, Wuhan, and Hangzhou, while Binjiang continues to focus heavily on Hangzhou. It can be seen from this that high-quality land plots in core cities are still the first choice for housing enterprises.
2. The land acquisition sales ratio of C&D and Greentown is higher than the industry average. Nearly 70% of the top 100 housing enterprises still did not acquire land in the previous April. Overall, the land acquisition sales ratio of the top 100 housing enterprises was only 0.16. Focusing on the top 10 sales companies: First, the top 10 land acquisition amounts in January-April accounted for 57% of the top 100, and investment was highly concentrated in leading companies; second, Greentown, Yuexiu, Longhu, Binjiang, and C&D's land acquisition rankings were similar to the sales rankings, and land acquisition sales were higher than the industry average. Among them, the land acquisition ratio of C&D and Greentown was more than 0.5; third, only Greentown, Longhu, and Binjiang increased the amount of land acquired in April compared to last year, while investment amounts from Poly and Zhonghai slowed slightly this year. and 74%.
3. The absence of “gold three silver four” compounded the slowdown in supply, and corporate investment continued to be cautious. Currently, from the perspective of the scale of supply and demand, the pace of land supply is comparable to the same period last year, and the scale of transactions is still basically the same. The balance between supply and demand in the industry is still being adjusted. Hot cities such as Shanghai, Hangzhou, and Hefei have all clearly slowed down the pace of land supply since the first quarter. Typically, Hefei's last two pre-land supply announcements have released only 4 parcels of residential land.
Until the relationship between supply and demand and market expectations return to health, the excessive decline in the size of the land market will continue for some time, and the decline in supply will affect the investment choices and judgments of enterprises to a certain extent.
On the corporate side, the absence of “gold three silver four” in the property market and sales falling short of expectations are still the most important factors leading companies to continue to invest prudently. At the end of the month, the Central Economic Bureau meeting proposed “integrated research on policies and measures to absorb existing real estate and optimize incremental housing”, and major cities have more or less relaxed purchase restriction policies. It is expected that the market will usher in the implementation of more policies and rules in the future. Housing enterprises and buyers all have a strong wait-and-see attitude. Until the market clearly bottoms out and shows a recovery trend, housing enterprises will maintain a cautious and wait-and-see attitude, and the dynamics of the land market will focus on state-owned enterprises and high-quality core plots.
03 Corporate financing
The scale continues to be low, and only the TOP10 echelon's financing volume increased year-on-year
Core views:
1. Total financing volume: In April 2024, the total financing volume of 65 typical housing enterprises was 28.07 billion yuan, a decrease of 29.5% from the previous month and a decrease of 56.5% from the previous year. Judging from the annual cumulative data, the total financing volume of 65 typical housing enterprises was 132,579 billion yuan, a year-on-year decrease of 44.84%. In terms of financing structure, domestic debt financing by housing enterprises this month was 27.657 billion yuan, a decrease of 26.6% from the previous month, a decrease of 48.1%; no enterprises carried out overseas financing; asset securitization financing was 350 million yuan, a decrease of 75.9% from the previous month, a decrease of 95.6% over the previous year.
2. Financing costs: From January to April 2024, 65 typical housing enterprises added 3.14% of bond financing costs, down 0.46 percentage points from the full year of 2023. Among them, overseas bond financing costs were 4.28%, down 3.76 percentage points from the full year of 2023, and domestic bond financing costs were 3.12%, down 0.36 percentage points from the full year of 2023. Looking at a single month, the financing cost of housing enterprises in April was 3.06%, a decrease of 0.04 pct from the previous month and 0.42 ct from the previous year. No housing enterprises carried out overseas financing this month, and since domestic debt issuers are still mainly state-owned enterprises such as China Resources Land, Zhonghai Real Estate, and initial shares, domestic financing costs remain low at 3.06%.
3. Corporate performance: The company with the largest total amount of financing this month was Rongsheng Development. The company obtained 4.15 billion yuan in financing through bank loans and cooperation with AMC. Looking at the enterprise hierarchy, the average financing amount of the top 10 housing enterprises from January to April 2024 was 3,523 billion yuan, the highest among all echelons. At the same time, the financing scale of housing enterprises in this echelon increased by 31.25% over the same period last year, making it the only echelon to show growth. In terms of financing costs, the financing costs of the TOP10 housing enterprises are still the lowest, at 2.75%, 0.27 pct lower than the financing cost for the full year of 2023, and 0.8 pct lower than the top 11-30 housing enterprises with the highest financing costs; the financing costs of TOP51+ housing enterprises decreased by 1.19 pct compared to the full year of 2023, the biggest drop.