The Zhitong Finance App learned that Tianfeng Securities released a research report saying that in the new round of affordable housing planning, the importance of guaranteed housing has once again been raised to the level of programmatic policies. Along with the acceleration of the urbanization process, housing prices are high due to insufficient housing supply in high-energy cities, and the housing difficulties of groups such as the working class are becoming more and more prominent. Driven by demand, guaranteed housing construction will enter a new round of acceleration. The government will contribute major incremental capital and raise land through multiple channels, while combining multiple actors to stimulate market vitality. I am optimistic about the incremental opportunities brought to the real estate demand side by the “three major projects” represented by guaranteed housing. Considering the characteristics of the industrial chain and guaranteed housing construction, it is recommended to search for high-quality targets according to the three main lines of contract construction, prefabricated buildings, and IDI insurance, focusing on recommending Poly Development (600048.SH), Huayang International (002949.SZ), and Conch Cement (600585.SH).

▍ The main views of Tianfeng Securities are as follows:

Incremental estimates: Guaranteed housing construction in 24 years drove investment exceeding 600 billion dollars, focusing on 35 cities

During the “14th Five-Year Plan” period, the country initially plans to build nearly 9 million affordable rental housing units, combined with preparations for 2.04 million units in 23 years. Considering that the promotion of the “three major projects” continued to accelerate at the previous policy level and that the development loan for the first allotted guaranteed housing project landed in Fuzhou, subsequent funding support is expected to drive the overall investment scale to exceed expectations. It is estimated that 2.1 million new guaranteed housing units will be built in 24 years, corresponding to an additional 95 million square meters of construction area and 32 million square meters of renovated construction area, corresponding to 409.5 billion yuan in investment.

Under a neutral assumption, new guaranteed housing accounts for 85% each year. It is estimated that guaranteed housing (excluding saleable) can drive more than 480 billion dollars in investment in 24 years, and considering saleable types, it can drive more than 630 billion dollars. Considering the increase in marketable guaranteed housing in the future, and in the form of a combination of new construction and renovation, it is estimated that in 24 years, saleable guaranteed housing is expected to drive more than 150 billion dollars in investment, and the total annual investment of guaranteed housing will drive more than 630 billion yuan.

Funding source & operation mode: multi-faceted, multi-agent, multi-channel

The government will contribute major incremental capital and lead land raising, and combine various forms to stimulate market vitality. 1) On the capital side, the central and local governments will be the main body, supported by fiscal and taxation policies, and financial institutions will provide long-term loans. At the same time, the focus is on promoting the connection between finance, finance, special bonds, etc., innovating financing models, and meeting the capital requirements of market players to participate in guaranteed housing projects through various models. Furthermore, it is expected that monetary instruments such as PSL may continue to be targeted in the field of urban reform and guaranteed housing construction in the future.

2) On the land side, land sources for guaranteed housing are supplied through multiple channels, such as land used for collective management construction, vacant land and houses owned by enterprises and institutions, unoccupied non-residential land and houses, and new supply of state-owned construction land.

New Housing Reform: Embracing Housing Security Model Reform with Chinese Characteristics

Document No. 14 was issued to clarify that saleable guaranteed housing is the focus of the new round of guaranteed housing construction. The core idea of the policy is similar to the Singapore model, but considering that the two countries have major differences in various aspects of national conditions, complete replication may not be appropriate. Drawing on and exploring China's guaranteed housing support system adapted to the two-track system is currently the main direction.

Divergent opinions: 1) On the pressure of guaranteed housing on the commercial housing market. Positioning classification, market isolation, or a viable path of coexistence between “guarantee” and “market”. It is also quite reasonable to achieve “blood transfusion” guaranteed housing through the renovation of megacities and urban reform to achieve “old, broken and small” renewal.

2) Targeting the impact of guaranteed housing on developers. “Market is market, guarantee is guarantee” does not change the demand center and affects the structure and proportion of market developers. Under the starting point of focusing on “people's livelihood” attributes and reducing the unfairness of intergenerational housing, the transfer of the security system for commercial housing may be unavoidable, but at the same time, it is also necessary to supplement time and smooth the cycle to prevent the occurrence of financial risks.

Risk warning:

Policy and financial support falls short of expectations, real estate sales fall short of expectations, and estimates are somewhat subjective.