平安证券:10月地产销售、开工同比延续弱势 短期建议关注政策博弈机会

Ping An Securities: Real estate sales and construction starts in October continued to be weak year on year, short-term recommendations focus on policy game opportunities

Zhitong Finance ·  11/16/2023 15:38

Against the backdrop of weak economic and property market recovery expectations, subsequent policies are expected to continue to improve, promoting further stabilization of the property market.

The Zhitong Finance app learned that Ping An Securities released a research report saying that in October, real estate sales and construction continued to be weak year on year, and against the backdrop of weak economic and property market recovery expectations, subsequent policies are expected to continue to improve, driving further stabilization of the property market. In terms of individual stock investment, the short-term recommendation is to focus on policy game opportunities. In the medium to long term, we continue to be optimistic about strong credit housing enterprises that actively acquire land to improve asset quality, financing, and sales. At the same time, it is recommended to focus on property management enterprises and industry chain opportunities.

Relevant targets: Poly Development (600048.SH), China Merchants Shekou (001979.SZ), Yuexiu Real Estate (00123), Huafa Co., Ltd. (600325.SH), China Overseas Development (00688), Binjiang Group (002244.SZ), Vanke A (000002.SZ), etc.; property management enterprises and industrial chain Poly Property (06049), investment accumulation (001914.SZ), Oriental Yuhong (002271.SZ), Hailuo Cement (), Beixin Construction () 600585.SH 000786.SZ), Weixing New Materials (002372.SZ), etc.

Matters: The National Bureau of Statistics released national real estate development investment and sales data from January to October 2023, of which the investment amount was 9.6 trillion yuan, down 9.3% year on year; housing construction was 8.2 billion square meters, down 7.3% year on year; 790 million square meters of new construction started, down 23.2% year on year; completed 550 million square meters, up 19.0% year on year; commercial housing sales area was 930 million square meters, down 7.8% year on year; sales volume of 9.7 trillion yuan, down 4.9% year on year; housing enterprises received capital of 10.7 trillion yuan, down 13.8% year on year.

Ping An Securities's views are as follows:

Investment continues to be under pressure, and short-term pressure remains.

Real estate investment in October was 0.9 trillion yuan in a single month, down 11% from the previous year, and fell by more than 10% for 6 consecutive months; from a regional perspective, investment in the East, Central, West, and Northeast regions fell 8.5%, 11.9%, 14.7%, and 20.9% year on year, respectively. The total price of residential land transactions in 100 cities fell by 24% in the first 10 months, and subsequent land purchase costs remained under downward pressure; at the same time, tight housing companies' capital limited construction and security performance, and the construction area in January-October fell 7% year on year. Against the backdrop of pressure on sales and tight capital, it is expected that short-term investment pressure will still exist. In the medium to long term, key projects such as urban village renovation and guaranteed housing construction will advance, or form some support for real estate investment.

New construction continues to be weak, and completion continues to improve.

In October, a new construction of 70 million square meters was started in a single month, down 21.1% year on year; construction area at the end of October fell 7.3% year on year, an increase of 0.2 pct from the end of September. Looking back, since sales still need to be repaired and the inventory removal cycle is too long, it will still take time for new construction to start repairs, but in the medium to long term, we should not be overly pessimistic about the absolute value of new construction starts or is close to the bottom range. In October, 6446 million square meters were completed in a single month, an increase of 13.3% year on year. The cumulative year-on-year increase in the previous 10 months was 19.0%. The apparent demand for float glass was relatively good, confirming the improvement in real estate completion. Considering that there are still twists and turns in the current recovery of the property market, and at the same time, the remaining guaranteed delivery projects are facing problems such as low saleable value and uneven quality, subsequent insurance delivery still depends on the continuous advancement of policies.

Sales declined month-on-month, and policies are expected to continue to improve.

In October, the sales area and sales of commercial housing in a single month fell 11% and 8% year-on-year respectively, and by 28% and 26%, respectively, from month to month. Popularity declined somewhat. On the one hand, the policy's role in boosting the market is declining marginally, and it still takes time for consumer confidence to recover. On the other hand, there are also restrictions on the supply of housing enterprises. According to data from Kerry City, the new supply of commercial housing in October fell 21% and 43%, respectively; the average opening and removal rate in key cities in October was 30%, down 7 percentage points from the previous month. Looking at the subregions, the sales area growth rates in the eastern, central, western, and northeastern regions in October were -15.1%, -15.6%, 2.8%, and -6.8%, respectively. On the first 14 days of November, the average number of new housing units sold per day in 50 mainstream cities fell 29% year on year. The growth rate has declined from October (-12%), and policy support is expected to continue to increase in the future.

Risk warning: 1) The risk that the recovery of the property market will not be as sustainable as expected; 2) the risk that the liquidity problems of individual housing enterprises will ferment and the chain reaction will exceed expectations; 3) the risk that short-term fluctuations in the real estate industry will exceed expectations; 3) the risk that short-term fluctuations in the real estate industry will exceed expectations.

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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