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中信证券地产24年投资策略:摆脱了信用困境 房企有望进入新的发展通道

CITIC Securities Real Estate's 24-year Investment Strategy: Housing enterprises that have escaped credit difficulties are expected to enter a new development channel

Zhitong Finance ·  11/14/2023 14:19

The industry has crossed the credit divide.

The Zhitong Finance App learned that CITIC Securities released a research report saying,After getting rid of the credit dilemma, housing enterprises are expected to enter a new development channel.The cost of new land reserves added by enterprises after 2022 is low, profitability is strong, and sales are reduced. It is estimated that more than half of the sales of leading leading central enterprises have acquired new resources after 2022. Time has begun to become a friend for some development companies. Some development enterprises can continue to buy new land, discuss disposal methods for stocks of inefficient land with local government departments, and optimize inventory structures. Smooth financing channels and strong development and operation capabilities are the key for enterprises to grow bigger and stronger in the new era of competition.

▍ The main views of CITIC Securities are as follows:

The vicious cycle has been gradually broken, and the industry has crossed the credit watershed.

Since the second half of 2021, more and more companies in the industry have experienced rising bond yields, and financial cash flow inflows have suddenly tightened, and finally moved towards a credit insurance path for debt restructuring. Supportive policies will move from quantitative to qualitative changes by the fourth quarter of 2023. The vicious negative feedback between credit, sales, and delivery has basically been cut off. Most consumers believe in the strength of delivery guarantees. Even before, insurance companies maintained a certain amount of sales payback.

The list of uninsured companies has changed a lot compared to a year ago. The historical costs on the corporate debt side are lower, while the asset side has also improved after a period of making up for new products and negotiating used goods planning conditions. State-owned capital expressed support for the credit of mixed ownership enterprises represented by Vanke. Credit risk is gradually subsiding.

It is expected that the impact of high linearization will increase in 2024, and a decline in investment and an increase in sales may coexist.

After 2022, the entire industry strongly focused on land acquisition in core Tier 1 and 2 cities. The decline in land acquisition area far outweighed the decline in land acquisition amounts. As the share of new goods in sales continues to rise, the share of slow or even stagnant development in old goods is rising. Since construction and security costs account for relatively low levels of total costs in Tier 1 and 2 cities, it is expected that the high linearization will exert significant pressure on real estate development investment after 2024. However, a higher linearization will also increase the certainty of corporate sales and boost the share of new home sales in the country's total second-hand housing sales.

The policy is expected to gain further strength, and sales are expected to stabilize.

The policy of housing approval and non-loan approval has indeed had a marginal effect, and the decline in commercial housing sales value and area across the country is narrowing. However, at present, housing prices in major cities are still falling more and less, and consumer and business expectations are still generally pessimistic. In the first quarter of 2024, driven by factors such as declining development investment, policies may be strengthened, mortgage interest rates may decline further, and the commercial housing market may completely return to commercial attributes.

It is estimated that the sales area and sales of commercial housing for the full year of 2024 will decrease by 7.9% and increase by 5.1% year-on-year, respectively. Higher linearization is the reason why commercial housing sales performance is significantly better than sales area performance. At the same time, due to the impact of high linearity and credit turmoil, after fully considering the hedging effects of affordable housing and urban village renovation, it is expected that the newly constructed housing area will drop 15%, the completed area will drop 20%, and real estate development investment will drop 8.8% throughout 2024.

Operating real estate performance is divided.

The supply of office and industrial park properties is expected to be plentiful, and rents are under severe downward pressure. Shopping centers and logistics warehousing assets are clearly differentiated. The determinants of the former are mainly management capacity and business district location, while the latter is mainly the supply of homogeneous warehousing land for logistics nodes.

Risk Factors:

There is a risk that housing prices will continue to decline, and that the effects of the policy will not meet expectations; the risk that the ability of some enterprises to supplement new goods is insufficient, the quality of used goods is too poor, and the sales scale and profitability will drop significantly; there is a risk that credit repair falls short of expectations and that corporate refinancing channels will run out.

Disclaimer: This content is for informational and educational purposes only and does not constitute a recommendation or endorsement of any specific investment or investment strategy. Read more
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