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天风证券:“房企白名单”和“三个不低于”如何解读?

Tianfeng Securities: How to interpret the “White List of Housing Enterprises” and “Three Not Less Than”?

Zhitong Finance ·  11/27/2023 14:32

Demand is unstable and policies are not stopping. I am optimistic that the simultaneous efforts of supply and demand policies will continue to drive the sector market, and I am concerned about poor expectations of financing support.

The Zhitong Finance app learned that Tianfeng Securities released a research report saying that on November 17, three departments including the central bank held a financial institution symposium to discuss a number of real estate finance easing policies. Supply-side financing support continues to follow the “three arrows” parallel path, and the bank expects the industry's financing situation to recover in '24. Demand-side high-level policy easing continues, or drives the phased release of improved demand. The long-term effects still need to be observed. However, the bank believes that demand is unstable and policies are not stopping. It is optimistic that supply and demand policies will continue to drive sector conditions simultaneously, and is concerned about poor financing support expectations.

Incident: On November 17, three departments including the central bank held a financial institution symposium to discuss a number of real estate finance easing policies. Point 1: The conference proposed “three no less”; 1) the growth rate of each bank's own real estate loans should not be lower than the average real estate loan growth rate in the banking industry; 2) the growth rate of public loans to non-state-owned housing enterprises should not be lower than the Bank's real estate growth rate; 3) the growth rate of personal mortgages for non-state-owned housing enterprises should not be lower than the Bank's mortgage growth rate. Point 2: The financial supervisory authority's “white list” of real estate enterprises, or covering 50 large-scale housing enterprises, will receive support from various fields, including credit, debt, and equity financing.

Tianfeng Securities's views are as follows:

What impact will “three no less than” have?

The first part of this conference is not lower than “the growth rate of each bank's own real estate loan is not lower than the average real estate loan growth rate in the banking industry.” The bank believes that the bank's overall real estate business growth rate needs to be increased or increased compared to the past, and that banks avoid a “lag” situation. Major state-owned banks may invest more actively in real estate loan business, especially public business, in the future. The second is not less than “the growth rate of public loans to non-state-owned housing enterprises is not lower than the Bank's real estate growth rate” and the third is not lower than “the growth rate of personal mortgages for non-state-owned housing enterprises is not lower than the Bank's mortgage growth rate” can be seen as the substantial measures proposed at this conference to “treat the financing needs of housing enterprises equally” and “do not hesitate to buy goods, remove goods, or run out of stock”, which are highly targeted at private housing enterprises and housing enterprises with mixed ownership systems.

The scale of credit for some housing enterprises increased after the “Financial Regulations 16,” but there is still room for improvement. The bank believes that this conference will set a lower limit on the level of banks' financing support for private enterprises at the level of specific indicators, which will help improve the common problem of financing difficulties for non-state-owned enterprises in the industry. Financial institutions take the lead in weakening their tendencies towards credit qualifications, or the premise that residents break the “belief in state-owned enterprises” and ease concerns about default, may also play a driving role in the recovery of private enterprise sales.

Which housing enterprises are likely to be selected for the 50 whitelist?

The proposed white list of financing support will cover 50 large-scale housing enterprises, including Xincheng Development, Vanke, and Longhu Group. The coverage has expanded compared to high-quality housing enterprises at the beginning of the year, and will continue to focus on the “three arrows” of credit, debt, and equity support paths in parallel. The bank believes that this adjustment continues the idea of “stabilizing demand first, stabilizing the main actors”. Against the backdrop of weak demand side recovery potential, the core goal of the policy is to mitigate the recent impact of weak sales, increased cash flow pressure on large high-quality housing enterprises, and further expansion of industry credit risk.

According to a report by China Real Estate News, in terms of form, the white list may be drawn up by the financial institutions themselves, with the central bank providing window guidance first, and the latter 50 listed companies will be approved by various commercial banks; in terms of scope, they may be initially screened according to the top 50 sales lists. Referring to Corey's sales ranking for the first 10 months of 2023, the bank believes that 1) uninsured high-quality non-state central enterprises are likely to be selected from the white list, which is the focus of this adjustment, such as Vanke, Longhu, Xincheng, and other private enterprises that have received second support, such as being beautiful, excellent, etc.; 2) mainstream state-owned enterprises, referring to equity sales scale; 3) At the same time, it is not ruled out that there is a possibility that housing enterprises that have already been insured, but are still operating steadily and have stronger financing support.

Private enterprise debt issuance continues to advance, and equity financing approval may speed up

Looking at the bond side, as of November 22, the “second arrow” has supported a total of about 20 private enterprises in issuing more than 36 billion yuan of debt financing instruments. Private enterprise bond financing has made substantial progress compared to last year, yet private enterprises are struggling with reduced cash flow, no additional reserves, and it is still difficult to obtain credit enhancement support. Therefore, the bank believes that efforts to support private financing through the second arrow may continue to increase in the future. Specific manifestations may include the continued extension, expansion, and increase of policies. More private enterprises that have not taken risks may receive substantial support, and the risk of default will be greatly reduced in the short term. Looking at the equity side, since 2023, more than 30 housing enterprises have applied for equity financing, and 8 housing-related enterprises have approved fixed growth plans by the Securities Regulatory Commission. The progress of fixed increases among housing enterprises has been uneven. The bank believes that after this symposium, the equity financing channels for housing enterprises are expected to be broadened and the approval speed will be accelerated in order to repair the balance sheets of high-quality housing enterprises, improve their cash flow, and guide market players back to a normal state of business.

New home sales fell by about 20% year on year in November, and second-hand housing sales picked up year on year

The weekly turnover of the new housing market was 3.21 million square meters, -18.05% from the previous month, down 8.68 pct from the previous month; the cumulative inventory was 16.65 million square meters, the removal of the second tier, the third tier and below accelerated, and the first-tier removal slowed down. The second-hand housing market sold 1.82 million square meters weekly, +25.82% over the same month, down 3.91 pct from the previous month. The weekly turnover in the land market was 28.17 million square meters, -27.73% on a rolling 12-week basis; total turnover was 43.6 billion yuan, -28.27% on a rolling 12-week basis; the national average premium rate was 2.32%, and the rolling 12-week year-on-year rate was -0.16 pct.

Last week, the Shenwan Real Estate Index was +4.17%, up 4.48pct from last week, ranking 1/31, ahead of the Shanghai and Shenzhen 300 Index by 5.01 pct. In terms of H shares, Wind Hong Kong's real estate index was +4.68% last week, up 2.36pct from last week, ranking 1/11, ahead of the Hang Seng Index by 4.07pct; Kerri's leading index of housing stock was 9.47%, up 7.45pct from last week.

Target aspects:

1) Recommended high-quality real estate leaders: China Merchants Shekou (001979.SZ), Poly Development (600048.SH), China Overseas Development (00688). It is recommended to focus on Yuexiu Real Estate (00123) and China Resources Land (01109);

2) Recommended undervalued property management companies: Investment Savings (001914.SZ), Poly Property (06049), recommended to focus on Wanwuyun (02602) and Financial Services (09666); 3) Recommended focus on guaranteed housing and urban village renovation themes: Greentown Management Holdings (09979), urban development (600266.SH), Chinese enterprises (600675.SH).

Risk warning: industry credit risk spreads; industry sales decline exceeds expectations; because city policies fall short of 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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