Real estate's most "miserable" mid-year report season, what signals are revealed...

time:2022-12-09 04:00:55source:chakarski.com author:Individual stock analysis
Real estate's most "miserable" mid-year report season, what signals are revealed...

It has been more than a year to accelerate the clearing, and the cold air has spread to all corners of the real estate industry. Data from the National Bureau of Statistics shows that in the first half of 2022, the national real estate development investment was 6,831.4 billion yuan, a year-on-year decrease of 5.4%. Among them, residential investment was 5,180.4 billion yuan, a year-on-year decrease of 4.5%. The cliff on the sales side is even more pronounced. According to the data of the National Bureau of Statistics, from January to July this year, the sales area of ​​commercial housing was 781.78 million square meters, a year-on-year decrease of 23.1%, of which the sales area of ​​residential buildings decreased by 27.1%. The sales of commercial housing were 7,576.3 billion yuan, down 28.8%, of which residential sales fell by 31.4%. If you only look at the data for the first half of the year, the national sales of commercial housing is only 6.61 trillion yuan, which is only 1/3 of the 18.1 trillion yuan in the whole of last year. The industry is suddenly cold, and leading companies are the first to bear the brunt. According to statistics from CRIC, in the first half of 2022, the full-scale sales of the top 100 real estate companies totaled 3,470.6 billion yuan, a year-on-year decrease of 50.3%. Even the top 10 real estate companies saw sales drop from 30% to 50% year-on-year. All kinds of information show that after peaking with a slight increase in 2021, the turning point of the real estate industry has really arrived. Behind the bleak mid-year reports and the sincere performance meetings, the new main line of the real estate industry has been clearly revealed. At the end of August 2022, at Vanke's interim results meeting, after many years, Yu Liang once again appeared on the Vanke platform. After shouting "live" in 2018, Yu Liang summed up the new tone of the real estate industry in four words. He said that the industry must find a way to "build a fire to keep warm". Guaranteed delivery! When the three red lines landed in 2020, no one thought that the real estate industry's pullback would be so large. Guosheng Securities Research Report shows that the revenue of 64 sample real estate companies fell by 11.5% year-on-year in the first half of the year, the first time the growth rate has been negative since 2017; as for the net profit attributable to the parent, the drop was as high as 47%, which was equivalent to the whole year of last year. This is the status quo of being able to maintain the operator in the cold winter. If the housing companies that have not yet given financial reports are taken into account, the situation may be even more "tragic". According to Wind data, among the 79 A-share listed real estate companies, 45 real estate companies are expected to lose net profit attributable to listed companies, and the total loss is expected to exceed 27.1 billion yuan; in addition, 34 real estate companies are expected to make profits, including The net profit of 21 real estate companies fell by more than 50% year-on-year. It is worth noting that most of the sample real estate companies that can maintain profitability are state-owned and central-owned enterprises with the endorsement of state-owned and central-owned brands; as for private real estate companies, most of them are under huge operating pressure. The management of the leading private enterprise even bluntly stated at the performance conference that under the guidance of "saving the industry, not saving the enterprise, saving the project and not saving the enterprise", the effective support obtained by (private) enterprises is not enough. Looking through the financial reports of various private real estate developers, we can find that there are several commonalities behind the general decline in revenue and profits: on the one hand, the company is affected by the epidemic, and on the other hand, it is also related to the safety of cash flow at the expense of profits. After all, in today's real estate industry, cash flow security is directly related to whether a company can "survive". As a result, the outside world can see that in the first half of the year, many private real estate companies were doing the same things, guaranteeing project delivery, guaranteeing sales receipts, and guaranteeing debt repayment. This is a "one-stop" main line of survival. Proactively repair the foundations of market confidence. There is no need to repeat the importance of guaranteed delivery, which is evident from the interim performance meetings of various housing companies. Longfor, a leading private housing company, disclosed that in the first half of the year, more than 70 projects and more than 50,000 residential units were delivered on schedule, 100% of which were delivered on schedule and 30% more than one month ahead of schedule. The waist private real estate enterprises under pressure, such as Ronshine China, are also conveying signals to the outside world. In the first half of the year, they have completed more than 15,000 deliveries and are still continuing to ensure the smooth delivery of follow-up projects. The crisis of supply cut-off caused by unfinished concerns requires large-scale real estate companies to quell with solid delivery. Therefore, no matter the scale, almost every private real estate company regards delivery guarantee as one of the priorities for restoring confidence. As for the restoration of confidence, another key point is confirmation. Stabilizing Debt Since Evergrande’s thunderstorm began in mid-2021, news about debt defaults of real estate companies in the real estate industry has been published from time to time. Since then, it has become common for “winter” real estate companies to reduce leverage and ensure debt repayment. choose. In the rapidly deteriorating financing environment, some people simply "lay down" directly, while others embark on the road of "debt repayment" despite the pressure of cash flow... For example, in the first half of this year, Ronshine China successively repurchased senior notes in the secondary market, And repaid a total of 700 million US dollars and a total of 1.235 billion yuan of ABS. Extending the time line, since the second half of last year, Ronshine China has accumulated a net repayment of public bonds and various interest-bearing debts and related interests of nearly RMB 30 billion. Ronshine China is a microcosm of the debt repayment of private housing companies. Since the beginning of this year, nearly ten private housing companies, including Country Garden, Agile, Jianye, Zhongliang, etc., have successively repurchased corporate bonds to optimize their debt structure. The total debt repayment of housing enterprises in half a year has exceeded 10 billion. Today, the restructuring and integration of the industry is still continuing. Although the financing port of the real estate industry has been loosened in the first half of the year, for a considerable number of private real estate developers, the financing level is still difficult to solve. Statistics show that in the first half of 2022, the cumulative total financing of housing enterprises was 412.6 billion yuan, a year-on-year decrease of 49%. According to the monitoring data of the China Index Research Institute, the total non-bank financing of real estate companies has reached 570.67 billion yuan since the beginning of the year, down 56.5% year-on-year. When financing channels are not available, where will the money come from? The answer is sales rebates. "Survive" sales and payment collection are the two internal lifelines for real estate enterprises to operate. In the first half of the year, promoting sales and recovering money has become the focus of each company's in-depth operations. However, during the downturn of the industry, sales, collections and profits attributable to the parent are often unable to achieve both. A larger-scale sampling report further showed that among the 169 listed real estate companies, more than 70% of the real estate companies' net profit attributable to their parent companies has fallen. In the past two years, in order to increase sales receipts, housing companies have adopted a large number of measures such as promotions and special destocking. The sales prices of some housing companies have fallen to a certain extent. Due to the influence of factors such as price caps and market downturn, industry profits The decline is indeed "inevitable". In the view of Vanke Zhu Jiusheng, the first choice for enterprises at this moment is to ensure operational safety. The pressure on gross profit margin is a short-term phenomenon. In the long run, the gross profit rate must return to a social average level. In addition to the above-mentioned factors, the 2022 interim report period coincides with the demolition cycle of land parcels acquired by real estate companies in 2020 and 2021. In the past two years, the land-to-sales ratio in the Yangtze River Delta and some first- and second-tier cities has been high, which has also put pressure on the profits of real estate companies that are deeply involved in the above-mentioned areas. For example, Ronshine China, as of June 30, 2022, has a total of 242 projects in Ronshine China, with a total land reserve of about 25.27 million square meters; among them, the land reserve in the Yangtze River Delta region accounts for 44%, and the land reserves in first- and second-tier cities are Reserves accounted for 83%. In the first half of this year, although its total revenue reached 14.251 billion yuan and contract sales reached 38.7 billion yuan, the gross profit in the same period was only 203 million yuan. However, everything has two sides. Compared with other regions, benefiting from population mobility and regional economic level, the land removal rate in the Yangtze River Delta and the first and second tiers is relatively high. Judging from the interim financial report, in the first half of the year, more than half of the large-scale real estate companies are increasing the scale of land storage in first- and second-tier cities and the Yangtze River Delta, and optimizing the structure of land storage. Taking Country Garden as an example, in the first half of the year, it added 9 new projects with a corresponding investment of only 6.1 billion yuan, of which 71% were distributed in second-tier cities, and the remaining 29% were in third- and fourth-tier cities. There is also a consensus within the real estate industry that the clarion call for industry restoration will be the first to sound from the Yangtze River Delta and first- and second-tier cities. With the recovery of the industry, real estate companies that are deeply cultivating in the first- and second-tier and Yangtze River Delta regions will also usher in a revaluation. However, the bottoming out of the industry is still a long way off. In July and August, the contracted sales of real estate companies still showed obvious signs of recovery. "In the short term, the market has bottomed, but recovery is a slow and gentle process," Yu Liang reiterated his judgment in June at the interim results meeting at the end of August, "In the short term, the market has bottomed, but Recovery is a slow and gentle process."
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