After the PBOC lowered the medium-term loan facilitation (MLF) at the beginning of the month, the lending rate of the loan market (LPR) also followed the adjustment, and the 5-year period was lowered for the first time since the LPR offer
The state has repeatedly stressed that “households are not speculative”, but in the face of economic downward pressure, the market expects that the future regulation and control will be relaxed, which will help alleviate the decline in industry risks. In addition, the “Golden September and Silver 10” interior sales are ideal. The market expects that the industry’s peak season in the second half of the year will continue to drive back the inner room. The market outlook remains optimistic.
The PBOC announced LPR in November on Wednesday, and the 1-year LPR reported 4.15%, as the market expected to cut 5 basis points; the 5-year LPR reported 4.8%, also dropped 5 basis points, and for the first time since the LPR quotation mechanism reform. Benefiting from the lower cost of new mortgages in the future, Chinese property stocks were once favored. The central government still strictly controls the property prices in the Mainland. The market also believes that the interest rate cut does not mean a policy loose signal, but the overall interest rate is falling, and the mainland housing policy may be fine-tuned.
Mainland housing policy or current fine-tuning
Galaxy Securities said that although the rate of interest rate reduction is not large, the significance of the signal is worthy of attention, highlighting the downward pressure of the economy. Although the macro direction is consistent with the general direction of regulation, the marginal intensity of the policy may be fine-tuned.
Citi also said that LPR’s first cut is earlier than the bank’s expectations, meaning that the new liquidity cycle will start, and there will be a gradual and regular downward adjustment. Citi continued, first- and second-tier cities have a stable plan, and for lower-tier cities, next year’s policy will focus on falling prices. In the next Politburo meeting and the Central Economic Work Conference at the end of the year, the tone of real estate policy may be more moderate. Among the mainland property stocks, the better Shifang (813), Xuhui (884), Longguang Real Estate (3380), Sunac China (1918), Longhu (960) and so on.
The atmosphere continues to pick up
In fact, since the sale of “Golden September and Silver 10” this year, the atmosphere of the inner room has continued to pick up. According to the latest statistics from the National Bureau of Statistics, the real estate development climate index for October was 101.14, an increase of 0.06 points per month.
Nomura recently published a report reaffirming his positive view on the domestic property industry. He believes that the risk of fundraising for most developers is controllable, mainly because their stock prices are still about 10% to 15% lower than their 12-month high, or their historical P/E ratio. Still 20% to 25% lower, coupled with the continued warming of the regulatory policy, and the rebound in contract sales growth.
The bank expects that the coverage of China property stocks in the fourth quarter will increase by 30% year-on-year. It is believed that most of the domestic enterprises will achieve the target sales this year, which is optimistic about Sunac, Xuhui, Aoyuan (3883) and Country Garden. (2007), all with a “Buy” rating.
In the sector, Shifang has been sung by many big banks recently. Among them, Goldman Sachs said that it has maintained a strong land reserve. The newly added land bank has reached RMB 90 billion this year. It is expected that the contract sales prospects will be strong from 2020 to 2021. Raise the target price to 34.6 yuan. The stock closed at 27.7 yuan yesterday.