Experts expect that banks will effectively increase credit investment in private housing enterprises by the end of this year and the beginning of next year.
The real estate sector is once again facing multiple major favorable catalysts. On November 27, eight departments including the central bank issued a notice proposing 25 specific measures to support the private economy. The notice specifically mentions reasonable satisfaction of the financial needs of private real estate enterprises. Experts expect that banks will effectively increase credit investment in private housing enterprises by the end of this year and the beginning of next year. Furthermore, the central bank issued the “China Monetary Policy Implementation Report for the Third Quarter of 2023". Among them, it is mentioned that treating real estate enterprises with different forms of ownership equally satisfies the reasonable financing needs of real estate enterprises with different ownership systems; real estate enterprises that operate normally do not hesitate to lend, draw loans, cut loans, etc.
On the same day, the Bank of Communications held a symposium with 15 housing enterprises in Shanghai. At the symposium, the Bank of Communications exchanged views with representatives of participating housing enterprises to further support the reasonable financing needs of housing enterprises. Prior to that, on November 24, China Construction Bank held a bank-enterprise symposium to support real estate companies' reasonable financing needs.
On November 17, the People's Bank of China, the General Administration of Financial Supervision, and the China Securities Regulatory Commission jointly held a symposium on financial institutions to study recent key tasks such as real estate finance, credit investment, and debt risk mitigation on financing platforms, and make important arrangements for the next steps. Among them, it was emphasized that it is necessary to implement the requirements of cross-cycle and countercyclical adjustment, focus on strengthening balanced credit investment, and consider credit investment in the next two months of this year and the beginning of next year in an integrated manner.
CITIC Construction Investment Securities said that the joint meeting of the three departments once again made it clear that all real estate companies with different ownership systems should be treated equally to meet the reasonable financing needs of real estate enterprises with different ownership systems. It is expected that the strength and breadth of subsequent policy implementation will increase, which is of great benefit to helping the real estate supply side get out of trouble faster.
It is worth mentioning that on November 20, Sunac China announced that all conditions for overseas debt restructuring had been met, and it officially came into effect on the same day. Sunac's overseas debt restructuring, which took 18 months, was officially announced successfully. This means that Sunac became the first major housing enterprise to complete all domestic and foreign debt restructuring processes. According to estimates, after the domestic and foreign debt restructuring is completed, Sunac will resolve the overall debt risk of about 90 billion yuan.
According to information, since the disaster took place last year, the Tianjin municipal government set up a special class for Sunac as soon as possible to guide and help them recover from chemical risks. Sunac China itself has also become one of the housing enterprises in the industry that has resumed operations rapidly, thanks to relevant measures to guarantee delivery, basic operations, and value, as well as the company's remaining high-quality assets. Sunac China said that in the future, it will better focus on securing delivery and returning to normal operations.
Professional analysis points out that regardless of the size of Sunac China itself in the real estate market or the debt problem, its influence has attracted attention from inside and outside the industry. The resolution or breakthrough of Sunac China's debt problem is of industry benchmark significance.
Tianfeng Securities said that supply-side financing support continues to follow the “three arrows” parallel path, and it is expected that the financing situation in the real estate industry will recover next year. Demand-side high-level policies continue to be relaxed, or drive the phased release of improved demand. The long-term effects still need to be observed, but demand is unstable and policies are not stopped. I am optimistic that supply and demand policies will continue to drive sector conditions simultaneously, and I am concerned about poor expectations of financing support.
Target aspects: 1) Recommended high-quality real estate leaders: China Merchants Shekou, Poly Development, China Overseas Development (00688). It is recommended to focus on Yuexiu Real Estate and China Resources Land;
2) Recommend undervalued property management companies: Investment Savings, Poly Property (06049); it is recommended to focus on Wanwuyun (02602) and Jinke Services (09666);
3) It is recommended to focus on the themes of guaranteed housing and urban village renovation: Greentown Management Holdings (09979), urban development, and Chinese enterprises.
Related concept stocks:
$SUNAC (01918.HK)$: On November 20, Sunac China issued a notice announcing that all conditions for overseas debt restructuring have been met, and it officially came into effect on the same day.
$CHINA RES LAND (01109.HK)$: According to operating data released by the company, from January to September of this year, the company's cumulative contract sales amount was about 234.33 billion yuan, and the total contract sales floor area was about 9.9181,000 square meters, up 16.0% and 7.5% from year to year, respectively.
$YUEXIU PROPERTY (00123.HK)$: In the first 10 months, the company's cumulative contract sales amount (together with contract sales for joint ventures and joint venture projects) was about RMB 121.03 billion, up about 32.8% year on year. The cumulative contract sales area was about 3,721,500 square meters, up about 17.6% year on year.
$LONGFOR GROUP (00960.HK)$: By the end of October 2023, the Group had achieved a total contract sales amount of 151.67 billion yuan and a contract sales area of 9.103 million square meters. In October, it achieved a total contract sales amount of 14.05 billion yuan and a contract sales area of 847,000 square meters in a single month.