Mainland “Because of City Policy” to regulate the property market, the performance of the interior is worth looking forward to

Mainland China insists that “households do not speculate”. However, in the face of slowing economic growth, some fine-tuning of the property market in the prime market can be expected. Shandong Heze City is an example. The relaxation of local policies will promote the increase in the volume of real estate transactions in second- and fourth-tier cities, drive the overall performance of developers, and provide a substantial basis for the stock price to rise. Housing stocks are worthy of attention this year. Hong Kong Commercial Daily reporter Feng Jinfeng

In 2018, GDP in the Mainland increased by 6.6% year-on-year. Although it was in line with the target of “6.5%” set by the authorities at the beginning of last year, it was the lowest in 28 years. Standard Chartered Bank (2888) predicts that the full-year economic growth in the Mainland will range from 6.0% to 6.5% in 2019.

At the same time of the decline in macroeconomic indicators, we have seen that in the context of “sports due to the city”, since August last year, the first- and second-tier cities in the Mainland have seen discount sales, hardcover and rough, special rooms and other pricing models. The real estate industry staged a scene of “price reduction to inventory, try to set funds”. However, real estate and related industries account for one-third of the mainland’s GDP, while real estate accounts for 70% of the average property of mainland residents. Under such a background, will the mainland authorities only focus on suppressing high housing prices without considering the ecology of the industry and the interests of stakeholders? It is not necessarily the case. For example, Chengdu’s new policy was introduced yesterday. The provident fund loan can support the payment of the first set of self-occupied housing for workers and families, or the second set of housing conditions for improving living conditions.

Longhu western soil storage increase revenue base

If the third- and fourth-tier cities are stable, Longhu (960) is worth paying attention to. Longhu’s interim results last year showed that the property development business had a turnover of 24.04 billion yuan (RMB, the same below), a year-on-year increase of 44.9%. The gross profit margin of the property development business was 34.8%, up 0.3% year-on-year.

During the period, the Group’s contracted sales amounted to 97.1 billion yuan, a year-on-year increase of 4.8%. The total sales area of ​​the building was 6.291 million square meters, up 5.7% year-on-year. However, the unit price of sales was approximately RMB 154,000 per square meter, a slight decrease of 0.8% from the same period of the previous year. In the Bohai Rim, the Yangtze River Delta and the western region, contracted sales were 30.55 billion yuan, 27.94 billion yuan and 24.65 billion yuan respectively, accounting for 31.4%, 28.8% and 25.4% of the Group’s contracted sales, respectively.

During the period, the Group acquired a total land area of ​​12.98 million square meters, an equity area of ​​89.98 million square meters, and an average equity acquisition cost of 4,849 yuan per square meter. According to regional analysis, the area of ​​the western region, the Bohai Rim region and the Yangtze River Delta region accounted for 46.4%, 20.7% and 19.8% of the total newly acquired land acquisition. With the gradual development of the western region, coupled with the loosening of the third- and fourth-tier urban policies to help destocking, the substantial increase in land reserves in the region will become the basis for future revenue.

According to the interim report, from January to June last year, the Group’s core after-tax profit margin (that is, the ratio of the core after-tax profit after the evaluation of the added value to the turnover) was 17.7%, compared with 17.5% in the same period of the previous year; That is, the ratio of core profit to share of profit after deducting minority shareholders’ equity and assessing value added is 13.8%, compared with 15.3% in the same period of the previous year, mainly due to the increase in turnover for the period, as well as expenses and points. It is the result of the combined effects of joint ventures and joint ventures’ performance and tax changes.

Goldman Sachs issued a report yesterday, raising the target price of Longhu from 31.4 yuan to 31.6 yuan, maintaining a “buy” rating, and predicting its share price to a 53% discount to the net asset value per share at the end of this year.

Goldman Sachs: Country Garden City Accumulates Growth

Another domestic house Country Garden (2007) increased its contracted sales volume by 29.52% in the first 11 months of last year, which is a good performance. How the group performed during the year and received much attention.

Goldman Sachs issued a report reiterating Country Garden’s (2007) “Buy” rating, but the target price was lowered to $13.9. In addition, the Group’s contracted sales forecast for this year was reduced by 10% to RMB 730 billion, which was roughly the same as last year’s level, and thus the Group’s earnings per share forecast for 2018 to 2020 was lowered by 5%, 3% and 1% respectively.

The bank said that Country Garden’s property sales growth this year has slowed significantly from the average of 77% in the past three years. It is expected that the Group’s land bank and scale expansion will also slow down accordingly. This year’s net asset growth prospects will slow down, so the target price net asset value will be discounted. Let it be expanded from 0% to 30%.

However, Goldman Sachs also said that the current valuation of the stock is still positive, as the stock’s stock price is an over-bear market situation reflecting a 30% drop in average selling price this year, representing a 14% and 23% decline in profit margins this year and next, but This is unlikely to happen due to the increase in property market easing policies in the past few months, including the injection of liquidity and deregulation.

In addition, the bank believes that low-tier cities with more businesses in the group will receive more government policy support, and in addition to slowing down the pace of expansion, Country Garden has also taken various measures to correct and control operational risks, believing it can be in the cycle. Accelerate market share growth during the transition.