Source: CITIC research, original title: "Real Estate | how to understand and guard against the risks of real estate enterprises and transition to a new development model"
The Financial Committee of the State Council held a special meeting to show that the risk of real estate enterprises is not an individual problem, and it is urgent to resolve the risk. We believe that the policy of further promoting sales and encouraging project mergers and acquisitions in the short term can be expected. Of course, to solve the problem of long-term development of the industry, there may be policies to promote enterprises to move towards a new model, that is, it may involve space holding, operation, renewal, rental and service business.
Affected by this, this morning, the real estate plate rebounded strongly. Xuhui Yongsheng service rose more than 26%, China Resources Mixc Lifestyle Services, Silver City Life Services and Country Garden Services Holdings rose more than 22%, Xuhui holding Group rose more than 23%, China Olympic Park, Metro Hyatt Service and Poly property rose more than 20%, Longguang Group rose 19.55%, Central Plains Construction rose 22.5%, China Jinmao rose 19.32%, China Shipping property and Country Garden Holdings rose more than 16%.
Institutions believe that the next few months will be a key time window for the credit of the industry, and investors should closely observe the implementation of urban policies, the continued implementation of demand-side support, changes in real estate market sales, and the development of mergers and acquisitions.
Vice Premier Liu he chaired a special meeting of the Financial Stability and Development Committee of the State Council.
The meeting pointed out that in order to effectively invigorate the economy in the first quarter, monetary policy should take the initiative to deal with it, and new loans should maintain moderate growth; with regard to real estate enterprises, it is necessary to promptly study and put forward strong and effective plans to prevent and defuse risks, and put forward supporting measures for the transformation to a new development model.
After that, the people's Bank of China conveyed and studied the spirit of the special meeting of the Financial Committee of the State Council, calling for preventing and defusing risks in the real estate market. The CBIC conveys and implements the spirit of the meeting, calling for improving the quality and efficiency of rural revitalization of financial services, helping "new citizens" to live and start a business in cities and towns, persisting in housing speculation, continuously improving the three stable and long-term opportunities, and promoting the transformation of the development mode of the real estate industry. encourage institutions to carry out M & A loans in a safe and orderly manner, focus on supporting high-quality real estate enterprises to merge and acquire high-quality projects of difficult real estate enterprises, and promote the virtuous circle and healthy development of the real estate industry.
In addition, the Ministry of Finance said that considering all aspects of the situation, there are no conditions for expanding pilot cities for real estate tax reform this year. This has a positive impact on stabilizing home purchase expectations and promoting the release of demand.
It is urgent to resolve the risks of real estate enterprises.
We believe that the purpose of this meeting of the Financial Committee of the State Council is to address the most critical topics in the operation of the economy and the most concerned topics of the market. In addition to macro topics, the meeting in turn mentioned real estate issues, Chinese stocks and overseas listing issues, platform economic governance issues and Hong Kong market stability issues.
Thus, from a financial point of view, the related risks of real estate enterprises are no longer the risks of individual enterprises, and it is urgent to resolve the relevant risks.
The means to resolve the risks of real estate enterprises are project mergers and acquisitions, and the premise of project mergers and acquisitions is stable sales.
The Bancassurance Regulatory Commission once again pointed out that it will focus on supporting high-quality housing enterprises to merge and acquire high-quality projects of difficult real estate enterprises. We believe that project M & An is an important means to resolve pre-sale regulatory problems and delivery concerns. However, the premise to promote project mergers and acquisitions is that the market sales return is stable, and the premise to promote sales stability is to encourage the release of reasonable demand for home ownership.
We expect that the policy will continue to push sales out of the trough. In the demand-side means, the financial support for the home purchase demand of "new citizens" may be worth paying attention to.
The transformation of the new development model, holding the operation and service business is worthy of attention.
The meeting also stressed the transformation of real estate enterprises to a new development model. This means that although the resolution of short-term risks may depend on mergers and acquisitions and loans, enterprises still need to adapt to a new era to solve the industry's long-term problems.
To put it simply, house prices may rise more slowly in the future (but it does not mean that prices will fall), the area of new housing development and construction may peak, and simple expansion of reproduction may face market challenges. We believe that the future of real estate enterprises mainly lies in the holding, operation and service of real estate space, including meeting the living needs of new citizens, leasing needs, renovation needs of old residential areas, urban space service business opportunities, and so on.
We believe that the relevant measures to support the transformation of real estate enterprises to a new development model may include: continue to expand the infrastructure REITs market to include more real estate basic asset classes; distinguish the equity and debt financing of development business from urban renewal, operation and maintenance, leasing and service business, and make more efforts to support the development of new model enterprises; fully activate idle funds, including idle provident fund and housing maintenance funds Strengthen the predictability of real estate policies and keep the caliber of general regulatory policies stable.
Risk Tips:The risk of debt default of cash-strapped real estate enterprises; the risk of profitability damage caused by continuous price cuts of development enterprises.
Investment advice:We believe that regulators fully understand the credit risks faced by real estate enterprises and attach great importance to resolving risks, which is the basic premise of a soft landing in the real estate market. The next few months will be the key time window for the credit protection of the industry, due to the implementation of urban policies, the continued implementation of demand-side support, changes in real estate market sales, and the development of mergers and acquisitions, are worthy of close observation by investors.
Although some companies have defaulted, some still face the difficulty of debt rollover, and others may face the challenge of shrinking tables, the policy is expected to strongly support demand and there should be no systemic risk in the real estate industry.
We are optimistic about high-credit real estate companies, including Poly Development, Jindi Group, Vanke A, Merchants Shekou, Midea Real Estate, Longfor Group, China Resources Land, Greentown China and Binjiang Group. We are also optimistic about independent property management companies, including Poly property, China Resources Mixc Lifestyle Services, China Merchants surplus, China Shipping property, Greentown Service, Jinke Service and Country Garden Services Holdings.
In addition, we believe that some real estate companies with large declines before, such as Jinke shares, Country Garden Holdings, Metro Holdings, Xuhui holding Group and other companies, although facing the challenge of shrinking tables, their performance may encounter phased challenges, but sustainable management ability can be trusted.
Edit / Corrine