Compared with the bright sales data of major listed real estate companies, investors in real estate stocks are hardly optimistic. According to wind data, as of June 27, the real estate sector has fallen by 7.09% since the beginning of the year, ranking sixth from the bottom among the 28 application level industries. In 2020, the sector index has also fallen by 8.64%, which can be described as falling continuously and losing the market.
Due to the low stock price, many real estate enterprises maintain their market value by means of repurchase and increasing their holdings. According to all media reporters of Southern finance and economics, since 2021, more than 30 listed real estate enterprises have launched buyback actions or increased holdings by major shareholders.
The overall sales performance is good, why is the performance of real estate stocks sluggish for a long time? Looking forward to the second half of the year, what is the investment value of real estate stocks?
Sales of commercial housing in the first five months hit a new record
According to the Statistics Bureau of the people’s Republic of China, the sales area of commercial housing in January may this year was 664million square meters, up 36.3% year on year, 19.6% higher than that in 2019, and an average growth of 9.3% in two years; The sales of commercial housing amounted to 7.05 trillion yuan, an increase of 52.4%; It is 36.2% higher than that in the same period of 2019, with an average growth of 16.7% in two years.
Even under the influence of the epidemic, the sales area and sales volume of commercial housing continued to reach a new high last year. Previously, the highest sales area and sales volume of commercial housing in China were nearly 1.717 billion square meters in 2018 and 15.97 trillion yuan in 2019 respectively, while in 2020, the sales area of national commercial housing reached 1.761 billion square meters, and the sales amount reached 17.36 trillion yuan, which broke through the new record.
Last year, the property market was hot, mainly due to the overall easing of credit policy after the epidemic. Meanwhile, due to the sharp decrease of overseas investment, the return of funds leads to the increase of domestic demand for home purchase. This year’s commercial housing sales prices and sales area will continue to hit a new high?
Chen Sheng, President of China real estate data research institute, analyzed to reporters, “in the first half of 2021, the performance of the real estate market is relatively hot, and the annual sales amount of commercial housing will increase compared with last year, but the change of sales area is still under observation. I think the sales area can maintain a certain high volatility, which may slightly decrease or increase, and the change is relatively small.”
At the same time, the policy also gives the real estate enterprises a “tight hoop curse”. Since the second half of 2020, the central government has successively issued heavy weight policies for the real estate industry, including the three red lines of real estate, the concentration of bank loans and the centralized urban land supply. The long-term mechanism of real estate industry is improved from three dimensions, namely, real estate enterprises, banks and local governments, and the competition pattern of real estate industry may be reshaped.
“In the first half of this year, the rise in sales and prices of commercial housing was driven by the demand for risk averse investment under the pressure of inflation. Therefore, the rise in sales and prices occurred more in the core areas of first and second tier cities and some hot spots, while the market in third and fourth tier cities was generally cold.” Bai Wenxi, vice president of China enterprise capital alliance, believes that the current lack of regulatory measures and the increasing difficulty of bank mortgage loan issuance under the control of the concentration of housing related loans, together with the rising interest rate, lead to a weakening trend in the sales trend of commercial housing in the second half of the year, while the probability of a new high in this year’s sales is relatively small.
However, while the power of the property market regulation policy is gradually emerging, the growth rate of commercial housing sales has slowed down in May. According to the data, the growth rate of commercial housing sales in the first five months of this year decreased by 15.8 percentage points compared with the cumulative growth rate in the previous four months, and the growth rate continued to decrease; The growth rate of sales area in the first five months was 11.8 percentage points lower than that in the previous four months.
As for the reason of the slowdown of the performance growth of real estate enterprises in May, some real estate industry analysts pointed out that “first, the real estate industry has experienced a phased correction after the traditional peak season of” gold, three silver and four “; Second, in recent years, many cities have strengthened property market regulation policies, such as price limit policy, which has reduced the enthusiasm of real estate enterprises to launch real estate; In addition, the low base effect of last year is gradually disappearing. ”
Looking forward to the future, toulilei, an analyst with Haitong Securities, believes that, considering the significant increase in the base of sales amount started in June, the growth rate is expected to further narrow year-on-year. On the other hand, it is expected that the regulation and control of popular cities will increase, and the demand level will be affected, while the market of some third and fourth tier cities will be cold. The above reasons will further narrow the growth rate.
Valuations of property stocks fell to a 10-year low
Compared with the continuous growth of the commercial housing market, the performance of listed real estate enterprises in the secondary market is not satisfactory. The recent analysis of Guoxin Securities research indicates that the current valuation of real estate sector is only higher than that of banks and construction decoration; Vertically, the current plate valuation is still at a low level in the past 10 years.
As of June 27, the real estate sector has fallen 7.09% since the beginning of the year, while the Shanghai Stock Exchange index has risen 3.87% in the same period, which has lost the market significantly.
In the real estate sector, Vanke, country garden, Poly Real Estate and other leading stocks showed weak performance. As of the closing of 25, Vanke A (000002.sz) closed at 24.51 yuan / share, which was at a low level in recent three years, and the stock price has fallen for three consecutive months; Poly Real Estate (600048.sh) closed at 12.47 yuan, with a minimum of 12.25 yuan in the session, a new low since July 2019.
In view of the stock price trend of the real estate sector, according to the analysis of the research reports of most securities companies, the real estate industry is restricted by policies such as “three red lines” and “double concentration”, so it is difficult for enterprises to increase leverage to continue on a large scale. At the same time, the rising land costs and housing prices make it difficult for real estate enterprises to increase year-on-year. As a result, the profit margin of real estate enterprises is squeezed, and the decline of profit margin and low profit of the industry have become the major trend of the industry.