Morton’s domestic house price rose 20%, earnings increased 20%, P/E ratio was 6.8 times lower

Insider analyst, Li Luoheng, executive director of JPMorgan Asia Pacific Equity Securities Research Department, sang good mainland property stocks. He believes that property prices in the Mainland will maintain a moderate increase and transaction volume will be stable this year. The trend of first- and third-tier cities is improving, especially for the third- and fourth-tier cities. More domestic developers are mainly due to their relatively low valuations and less competition than first- and second-tier cities.

He estimates that the developer’s earnings will still reach new highs this year and next, even in 2021, and most of the profits have been locked in. The profit risk is low. If the price-earnings ratio remains unchanged and the annual profit will increase by 15% to 20%, the stock price will still rise. % to 20%.

Li Luoheng said that the current average price-earnings ratio of the mainland property sector is 6.8 times. During the period when the property market policy is stable or favorable, the average price-earnings ratio can be at the historical average of 7.5 times to 8 times. Therefore, it is considered that the current price-to-earnings ratio of the house will rise to 8 times. top.

In addition, the bank prefers developers with more commercial assets. It is believed that the impact of e-commerce on traditional shopping mall operators has come to an end. Last year, e-commerce sales dropped from 20% to 30% in the past, which is in line with the growth of physical retail sales. The operating environment of the mall has improved.

Property prices are expected to rise 5% this year

Li Luoheng also pointed out that this year’s domestic saleable resources increased by 21% year-on-year, and the sales target increased by an average of 17%. It is relatively conservative. In terms of sales ratio, developers are more cautious than last year, but sales are expected to be higher in the second half of this year. After half a year of improvement, the annual sales ratio should be similar to last year, with sales growth of 20% to 25%. It is estimated that the middle and lower sections of the second quarter will rebound and it is not excluded that individual developers will raise their sales targets.

In terms of property prices, he said that the purchasing power of the mainland property market was weak at the end of last year. Under the devaluation of the renminbi and the relatively weak macro economy, the market conditions were not good. The current property market policy is shifting the market’s property market expectation from a downtrend to a stable and moderate. As the price rises, the government allows property prices to rise by 5% and no more than 10%. Property prices are rising by less than 1% per month, which is consistent with the annual income growth rate of residents. Therefore, Motong expects property prices to rise by about 5% this year. The price of square meters is at the level of 9,000 yuan. At the same time, as developers are not optimistic about future property price expectations, buying land has become very cautious.

Financial policy is tightening at the end of the year

Asked about the policy changes that are most concerned about this year, Li Luoheng believes that the policies of the first, second and third tier cities are different. The price of first-tier cities is still subject to the price limit and the tax on second-hand property transactions. Second-tier cities are concerned about the purchase restriction and related talents. Settled to relax, and the market conditions of third-tier cities depend on the shed reform policy.

At present, the price limit of first-tier cities has shown some signs of relaxation. Second-tier cities have also seen the adoption of talent introduction policies to relax the purchase restriction. It is expected that the cash subsidies for third-tier cities will not be reduced year by year, and will still maintain about 2 million or more. The relevant policies can be benefited and the trading volume can be kept stable.

As for risk, he said that it is necessary to pay attention to the policy turnaround time. The past policy relaxation cycle generally lasted for 12 to 18 months. The current cycle has been experienced for about 6 months since October last year. The financial policy at the end of this year or the first half of next year may have The tightening and local government may strictly enforce the price limit order.